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Ch2 Market Research, Advantages & Disadvantages, Primary Data - Main…
Ch2 Market Research
Market Research
Important because? Customers differ in...
- The benefits the want
- Amount they are ABLE to and WILLING to pay
- Quantities they buy
- Time & Place they buy
Insights provided by effective Market Research
- Dimensions of the market (size, trends etc.)
- Competitor Strategies (market share positioning, USP's)
- Needs, Wants & Expectations of Customers (& how these are CHANGING)
- Market segments - existing & potential opportunities for new segments
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Market Segmentation
A Market Segment is an identifiable 'subgroup' of a larger market who hold common characteristics or preferences.
How to slice up a market?
eg. the car market is a good example of how socio-economic segmentation is often used
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Which segment is the best?
This would depend on:
- the nature, size, potential $ of the segment
- cost of entering the market
Growing Use of IT to Support Market Research
- Relatively easy to learn about consumer preferences and buying habits by mining massive sets of quantitative data.
- Complex Algorithms can uncover patterns and correlations that enable more effective marketing.
Source of both primary and secondary research
Key Benefits of IT (example of secondary research).
- Quick & automated
- Huge sets of data can be analysed = reduced need for sampling
- Data can be linked (eg. transactional data with customer profiles)
- Software can quickly highlight what customers are saying about the product or brand (SR)
- Surveys are easy to set up and analyse results in real time.
- Wide range of powerful software applications to manage social media research & integrate with other business systems.
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Secondary Data - Main Sources
Google/Internet - quick market research for free
Trade press & magazines - Industry and market insights from professional business publishers
Market research reports - Commercial organisations produce a wide variety of reports (online & print) that analyse individual markets & industries
Advantages
- Often free & easy to obtain
- Good source of Market Research insights
- Quick to access & use
Disadvantages
- Can quickly become out of date
- Not tailored to business needs
- Specialist reports often quite expensive
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Key Elements of this topic
- Product & Market Orientation
- Primary & Secondary market research
- Quantitative and Qualitative research
- Limitations of Market Research, Sample size & Bias
- Use of ICT to support market research
- Segmentation
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