1.1.2 Market Research

• Product orientation


  business prioritises product's design quality or performance rather than meeting customer preferences to guide production and marketing decisions

  apple iphones, gilette razior blades, sony walkman
• Market orientation

  customer-centered approach to product design. It involves market research aimed at determining what consumers view as their immediate needs, primary concerns, or personal preferences within a particular product category

  audi car, chosen by you asda groceries, amazon
• Market orientated, customer is priority and listens to wants and needs - advantages

  • meet customer needs
  • be more competitive
  • adapt quickly
• Market orientation disadvantages

  continuous market research, timely and costly

  training employees

  competition also market-orientated
• Product orientation prioritises product's design quality/performance rather than customer needs advantages

  • product sells itself
  • high quality
  • focus on production capabilities
• Product orientation disadvantages

  • competitors may be market-orientated, meets needs better
  • high research and development costs
  • missed opportunites
• advantages PO

  customer satisfaction

  increased brand loyalty
• Market research is the process of gathering information about a market or customer base in order to make informed decisions about a product or service.
• Primary research is the first hand information gathered by the researcher. It is usually done by asking questions to the respondents.
• Why do businesses collect market research data?

  assess potential demand for product

  promotional benefits and best option for launch of product

  assess competition, where do potential customers shop, substitute or complementary goods?
• Examples of primary research: surveys, interviews, focus groups, observations, experiments
• Advantages of market search

  reduces risk and cost of making poor decisions

  develop marketing plan based on data
• Advantages of primary research

  • reliable
  • data is up to date and relevant
  • interpret data better
  • detailed insight
• Disadvantages of market research


  research could not give enough information

  data could be inaccurate or misleading

  data is non-specific to business

  reliability differs
• Disadvantages of primary research

  time consuming

  expensive

  survey bias, research samples not representative
• Secondary research is data that has already been collected and is available to the researcher.
• Examples of secondary research: newspapers, magazines, books, websites, and databases.
• Advantages of secondary research


  accessible

  low cost

  variety of research methods and examples
• Disadvantages secondary research

  out of date

  unreliable

  non specific
• Quantitative data is data that can be measured, counted, or calculated.
• Examples of quantitative data: - Number of people who visited a website - Number of people who watched a TV advertisement - Number of people who bought a product
• Qualitative data seeks to gather and explore feelings and thoughrs about a product from consumers
• Qualitative data examples


  focus group discussions

  interview

  observations of buyer behaviour
• How can IT be used to support market research

  company websites

  social networking

  databases
• Benefits of using IT to aid market research

  higher response rates

  engage customers

  global reach, cheap and fast to reach wide audience
• Drawbacks of using IT to aid market research

  robots risk, need genuine users to prove valid

  cannot control who takes part in research
• Social media, market research


  online surveys, follower count, hashtags, success and reviews of product launch
• Effective market research

  reduce risk

  understand consumer behaviour

  quantify potential consumer demand

  find out how much consumers are willing to pay
• Market segmentation is the process of dividing a market into smaller groups of customers with similar needs and characteristics
• Examples of market segmentation: Age, Gender, Income, Location, Lifestyle, Occupation, Products, Purchasing Power
• Benefits of market segmentation

  easier to research needs of segment

  design product meeting needs

  focus advertising to segment
• Drawbacks of market segmentation


  difficulty in identifying most important segment for business

  failure to meet needs of customers not including segment

  recognising and adapting changes within segment

  limiting potential money