Theme 1

• Three advantages of primary market research:

  • Specific to the business
  • Can be conducted in a variety of ways
  • Competitors cannot benefit if the findings are kept private
• Three disadvantages of primary market research:

  • Slow and labour intensive
  • Expensive
  • Subject to bias
• Three advantages of secondary market research:

  • Quick and easy to source
  • Cheaper
  • Ideal for simplified results
• Two disadvantages of secondary market research:

  • May be outdated
  • May be subject to bias
• Qualitative research provides detailed information but can be difficult to analyse and it takes time to produce a large number of results.
• Quantitative research is quick to carry out and can be conducted on a large scale but often does not provide much detail.
• A product orientated business focuses on the product and its design, quality and performance.
• A market orientated business focuses on the consumer and their preferences.
• Data mining can be useful to quickly analyse data to determine information such as consumer trends and sales patterns.
• Social media can be used to quickly find surface-level information about consumers and competitors.
• Market research is used to find out what customers want, to predict demand and to discover information about the business environment.
• A franchise allows the franchisor to grow quickly as most costs and risks are taken on by the franchisee.
• A franchise is a good way for an entrepreneur to start a business as they can use an existing brand model and can gain support from fellow franchisees.
• A social enterprise is a business that is set up with the core aim to use its profits to benefit society in some way.
• In a niche market the business can charge premium prices as there is less competition and will often experience stronger brand loyalty.
• Businesses in a niche market will often experience higher costs as there is less potential for profit and they will have less access to economies of scale.
• Branding involves the creation of an identity for the business that distinguishes it from other firms. Consumers will have a perception of what to expect from the brand.
• Branding can add value to a product so firms can charge higher prices and can build brand loyalty.
• Building a brand takes a long time and high development costs are involved. If a brand grows too quickly, demand can be difficult to keep up with and any bad publicity can have major negative effects.
• Brand extension means adding a new product to a recognised brand name.
• E-commerce is quicker and provides consumers with more choice. It also means that businesses have access to a larger market and reduced operating costs (e.g. overheads).
• Market positioning involves understanding how customers perceive their product in comparison to competitors. The way a business positions itself depends on product differentiation.
• The design mix includes:

  • Aesthetics
  • Function
  • Cost
• By using market segmentation, a business can better understand how to position itself to meet its target market.
• The product life cycle can aid market positioning and help forecast future sales.
• The product life cycle is only theoretical and it can vary from product to product.
• Some extension strategies include lowering the price of a product, increasing advertising or encouraging wider use of the product.
• The Boston matrix includes:

  • Dogs
  • Cash cows
  • Question marks
  • Stars
• The Boston matrix is used to compare the profitability of different products and determine the best strategies for growth.
• The Boston matrix is only a snapshot of the business' current position and market share and market growth are not the only two factors important to a business.
• The marketing mix:

  • Product
  • Place
  • Promotion
  • Price
• Distribution (place) is one of the key elements of the marketing mix. It is the process of getting the product to the consumer.
• A business should choose its distribution channel based on the channel length, their choice of intermediaries and their control over the channel.
• Direct distribution is when the producer deals directly with the consumer.
• The main aim of promotion is to ensure that customers are aware of the existence and positioning of products.
• Sponsorship is when a business pays for some or all of the costs involved with an event in return for brand awareness.
• Endorsement involves a celebrity or public figure recommending a product to build brand awareness. This can be paid or unpaid.
• There is an inverse relationship between the quantity demanded of a good and its price.
• There is a direct relationship between the quantity supplied of a good and its price.
• Price elasticity of demand (PED) measures the responsiveness of quantity demanded for a product to a change in its price.