1.2

• Market research is the process of systematically gathering data from consumers which can be used to influence business decisions
• Understanding customer needs about Price, Quality, Choice, and Convenience is crucial for businesses
• Price is the amount of money a customer is willing to pay for a product/service
• Quality refers to the standard of excellence that a customer expects from a product/service
• Choice is about offering a range of options that cater to different customer preferences
• Convenience is valued by customers who want products/services that are easy to access and use
• Identifying and understanding customers is essential for the success of any business, especially in generating sales and ensuring business survival
• Market research helps businesses to make informed decisions about the most effective way to use their valuable resources
• Market research enables the firm to develop the correct marketing mix
• Primary research involves gathering information directly from consumers using field research methods like surveys, interviews, and observation
• Secondary research involves the collection, compilation, and analysis of existing data
• Quantitative data is based on numbers, while qualitative data gathers descriptions or explanations based on conversations and impressions
• The limitations of qualitative data include small sample sizes and bias, while quantitative data may be out-of-date and expensive to purchase
• Social media platforms like Facebook, Twitter, and Instagram provide businesses with market research opportunities due to their speed of communication and low cost
• Market segmentation is the process of dividing a single market into submarkets or 'segments' based on different consumer characteristics
• Segments can be based on factors like geographical location, demographics, behavior, lifestyle, age, or gender
• Market segmentation allows businesses to alter products and marketing activities to meet different needs of consumer groups more precisely
• Advantages of market segmentation:

  • Recognizes that consumers have different tastes and preferences
  • Products and marketing activities can be tailored to meet different needs of consumer groups
  • Less expensive and wasteful than marketing to wide market segments
• Disadvantages of market segmentation:

  • Not everyone within a segment will behave the same way
  • May be difficult to identify a segment and consumers can belong to multiple segments simultaneously
  • Segmentation requires detailed market research which can be costly
• Market mapping is a tool to identify the position of a product within a market using a two-dimensional diagram showing product attributes compared to rivals' products
• Market mapping helps identify gaps in the market where new product ideas can be developed
• Market mapping limitations:

  • Mapping may require expensive primary research
  • Only two criteria can be chosen, which may be too simplistic
  • Market maps provide insight at a specific point in time
• Competition occurs when at least two businesses provide goods/services to the same target market
• Direct competition happens when businesses target customers with the exact same product as a competitor
• Indirect competition occurs when firms sell different products but compete for customers' disposable income