Describes the difference between product and market orientated approaches to businesses, why businesses conduct market research, primary and secondary research and the pros/cons of both, sampling size and representation, how ICT can be used in market research, and market segmentation.
Theme 1 Topic 10
Market Research
Product Orientation and Market Orientation
Market Orientated Approach – a business reacts to what customers want.
Information is gathered about customers needs and wants, rather than what the business thinks is
right for the customer and then decisions are made accordingly.
Most successful businesses take a market-orientated approach
Product Orientated Approach – the business develops products based on what it is good at making or doing
rather than starting with what a customer wants.
This approach tends to lead to criticism because it often leads to unsuccessful products, particularly
in well-established markets.
Most markets are moving towards a more market-orientated approach as customers have become more
knowledgeable and require more variety and better quality.
However, some products are argued to create a need or want in the customer, especially products with a very
high technological content.
Market Research
Market Research – gathering and analysing data to assist with business decision making.
Why Conduct Market Research?
To see if there is a gap in the market
To inform pricing decisions
To spot trends in the industry
To find out which promotion ideas are most effective
To anticipate demand levels
To give proof to investors that the idea is viable
To reduce risk with product launches
Primary vs Secondary
Market Research Definition Methods
Primary The collection of information first- Written questionnaire
hand for a specific purpose Telephone survey
Focus group
Test marketing
Secondary Using information that already exists Government reports and statistics
Newspapers and magazines
Competitor information
Market research organisations
Quantitative Research – based on larger samples, uses closed questions and is more statistically valid. Will
generally be in numerical form.
Qualitative Research – based on in-depth opinions and attitudes. Opinions are usually obtained from small
numbers of people, so the findings are not necessarily statistically valid. However, this data can highlight
potential issues which can be explored in quantitative research.
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