1.3.5 Understanding the consumer - created from Mind Map

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Advantages and Disadvantages of Market Research

Types of market research

Sampling

Market segmentation

Limitations

Benefits/ Uses

Tricky in foreign market

Some markets change quickly

Managers may misunderstand the data and make inaccurate decisions

Understand the consumers behaviours

Understand the competiton (prices, products etc.)

Identify potential demand

Study competitors and USPs

Primary research

Secondary research

Obtained first hand, by the business, so directly relates to data the business needs. It is also known as field research. Example: Surveys, interviews

Methods: Questionnaire/survey, focus group, observation, test marketing

Advantages: Up to date and relevant, Can produce unique data that competitors do not have

Disadvantages: Expensive, time-consuming, may require specialist skills

'Desk research'. Data that has been gathered already by another organisation. Example: News articles, research papers

Methods: Market reports, government data, economic historic data, internet, trade publications

Advantages: Available immediately, Often free (cheaper than primary research), provides generalised information on market size and share

Disadvantages: May be out of date, may not be accurate, could be expensive to purchase, rivals are able to access the data too

Methods of sampling:

Use: Sampling allows a firm to take a unbiased sample for market research, and also specify between qualitative and quantitative data.

Cluster: a population is divided into sections, such as location or age. Samples are then taken from theses divisions

Random: each member of the population has equal chance to be chosen, so a sample is taken from random

Quota: a sample is taken from a tailored group of people specific to the data needed i.e. age or income

Convenience: a sample is taken from 'convenient' population, such as people on the nearby street or in the phone book

Types of segmentation

Advantages: Identify who to market to properly, identify potential new markets, improve customer loyalty, reach more customers

Disadvantages: Time consuming, can be costly, have to choose the correct method in order to produce appropriate data

Demographic

Behaviour

Geographic

Psychographic

Age, race, religion, gender, family size, ethnicity, income, education

Cookies, previously bought products, hobbies

Location

beliefs, values, and reasons