Market Research

• what is product orientation?

  business develops products based on what it is good at doing
• disadvantage of product orientation?

  business may move further away from what market is looking for - increasing the risk of business failure
• market orientation?

  business responds to customer needs and wants - designs products accordingly
• advantages of market orientation:

  • firm will benefit from increased demand
  • increased profits
  • valued brand image - as products become more desirable
• what is market research?


  the objective collection, complication and analysis of information about a market
• how effective market research will help the business:

  • reduces risk when launching new products/entering new markets
  • wants future needs and wants of consumers
  • to understand consumer behaviour
  • to identify potential consumer demand
  • to identify how much consumers are prepared to pay
  • to identify competitors - measure their potential strengths and weakness
• what is databases?

  • used to store large amounts of customer information
  • effective in collecting customer e-mail address so that targeted customers can be surveyed later
• what is social networking?

  focuses on gathering information about consumers
• what is a company website?

  • allows business to collect primary data more cheaply
  • pop-ups: used on website can also be an effective way of gathering information
• what is market segmentation?

  the process in which a single market is divided into sub markets/ segments
• what is a segment?

  represents a slightly different set of consumer characteristics
• what are the advantages of market segmentation?

  • recognises that consumers are not all identical - do not all share the same tastes and preferences
  • products + marketing activities can be altered to meet different groups of consumers and targeted more precisely
  • less expensive + wasteful than marketing products
  • may increase loyalty if consumer feels that their needs are being met - can lead to repeat purchases
• what are the disadvantages of market segmentation?

  • not everyone within a segment will behave in the same way
  • may be difficult to identify a segment + consumers can belong to multiple segments at the same time
  • segmentation requires more detailed market research - can be expensive
  • segment may be identified but may be too small + unprofitable to cater for
• what is primary research?

  process of gathering information (that is new) directly from consumers in the target market using field research methods (surveys, interviews)
• what is a survey?

  • most used method is to use sampling by using surveys
  • ask a series of questions to a certain number of people
  • results used to make inferences which are then extrapolated for wider population
• what is an observation?

  • involves hiring someone to stand in public to study consumer behaviour
  • researches may observe impact on consumer choice or the impact that the particular placement of a product in a store may have on consumer choice
• what is an interview?

  • like a survey but an interviewer asks the question
  • takes longer but allows the interviewee to ask follow-up questions + gather more information that may be missed when conducting surveys
• what is test marketing?

  free samples provided for a limited period to target market to gauge their response to the product
• what is focus groups?

  • free range discussions led by a marketing specialist to collect detailed feedback on all aspects of the marketing mix from the target market
  • usually limited to a small group of 12-15 people
  • lasts between 90min-3hours
• what are the advantages of primary research?

  • information gathered is focused on needs of business + not available to rivals
  • in-depth information from respondents
  • more up-to-date and can be used to ask specific questions + more relevant
• what are the disadvantages of primary research?

  • sample size too small + representative of all of the customers leading to unreliable results
  • bias - researchers can guide respondents to answer questions in a particular way and influence others
  • may need to hire a specialist market research agency to help - may be expensive + time-consuming
• what is secondary research?


  involves the collection, complication and analysis of data that already exists
• what are the advantages of secondary research?

  • information already available - quicker to collect than primary research
  • information is free + cheaper to collect - lower costs compared to primary research
  • suitable for a small business that lacks a large marketing budget
• what are the disadvantages of secondary research?

  • information collected for other purposes - may lack relevance/ may not be factually
  • expensive to purchase market specific secondary data from specialist
  • information may be out-of-date