3.3

• Primary research


  Data collected first hand for a specific research purpose
• Secondary research


  Data that already exists and which has been collected for a different purpose
• Main sources of primary data

  - Observation

  - Postal surveys

  - Telephone interviews

  - Online surveys

  - Focus groups

  - Face-to-face surveys

  - Test marketing

  - Experiments
• Main sources of secondary data

  - Google

  - Government departments

  - Trade press (magazines & newspapers)

  - Trade associations

  - Competitor websites & marketing materials
• Advantages of primary research

  - Directly focused to research objectives

  - Kept private (not publicly available)

  - Up to date information
• Disadvantages of primary research

  - Time consuming

  - Expensive

  - Risk of survey bias

  - Sampling may not be representative
• Advantages of secondary research

  - Inexpensive

  - Easy to obtain

  - Quick to access and use

  - Good source of market insight
• Disadvantages of secondary research

  - Can quickly become out of date

  - Not tailored to business needs

  - Specialist reports are often quite expensive
• Quantitative research


  Research that collects data primarily in numerical form
• Qualitative research


  Based on opinion, perceptions, attitudes, beliefs and intentions
• Main method to collect quantitative data

  - Telephone

  - Postal survey

  - Face-to-face

  - Online
• Advantages of quantitative research

  - Data relatively easy to analyse

  - Numerical data provides insights into relevant trends

  - Can be compared with data from other sources (e.g. competitors, history)
• Disadvantages of quantitative research

  - Focuses on data rather than explaining why things happen

  - Doesn't explain the reasons behind numerical trends

  - May lack reliability if sample size and method is not valid
• Advantages of qualitative research


  - Essential for important new product development and launches

  - Focused on understanding customer needs, wants, expectations (very useful insights for a business)

  - Can highlight issues that need addressing - e.g. why customers don't buy

  - Effective way of testing elements of the marketing mix - e.g. new branding, promotional campaigns
• Price elasticity of demand (PED)

  - Shows how RESPONSIVE the demand for a product is

  - Shows how likely demand is going to rise or fall depending on the price of the product/service
• To increase the revenue....

  - If the product is elastic - you have to decrease the price

  - If the product is inelastic - you have to raise the price
• If you have inelastic demand and price decreases...

  = Fall in revenue
• If you have a inelastic and price increases....

  = Gain in revenue
• If you have unitary demand and price decreases ...

  = No change
• If you have elastic demand and price decreases...

  = Gain in revenue
• If you have elastic demand and price increases...

  = Fall in revenue
• YED answer


  - If the answer is positive it is a normal/luxury good

  - If the answer is negative it is an inferior good
• 4 stages in the product lifecycle

  - Introduction stage

  - Growth stage

  - Maturity stage

  - Decline stage
• High relative market share-high market growth rate

  Stars
• Low relative market share-low market growth rate

  Dogs
• High relative market share-low market growth rate

  Cash cows
• Low relative market share-high market growth rate

  Question marks
• Pros of advertising

  - Wide coverage (builds brand awareness)

  - Control of message - Repetition means that the message can be communicated effectively

  - Effective for building brand awareness and loyalty
• Cons of advertising

  - Expensive

  - Impersonal

  - One way communication

  - Lacks flexibility

  - Limited ability to close a sale
• Penetration pricing

  - Opposite of price skimming

  - Offer a product at a low introductory price

  - Price can be increased once target market share is reached

  - Eg. selling an inkjet printer at a low price to build customer usage - however the cartilage is expensive
• Price skimming

  A pricing strategy that involves setting prices higher than those of the competition to maximise profits
• Dynamic pricing

  - Set flexible prices based on current market demands

  - Dependent on technology
• Two-stage distribution

  PRODUCER→CONSUMER
• Three-stage distribution

  PRODUCER→RETAILER→CONSUMER