CHAPTER 4
MARKETING
Contents
CHAPTER 4.............................................................................................................................. 1
MARKET RESEARCH (33)...................................................................................................... 1
IMPORTANCE OF MARKETING (34)........................................................................................ 3
MARKET SEGMENTATION (35).............................................................................................. 5
PRODUCT (36)...................................................................................................................... 6
PRICE (37)............................................................................................................................ 8
PLACE (38)........................................................................................................................... 9
PROMOTION (39)................................................................................................................ 10
MARKET RESEARCH (33)
Marketing involves a range of activities that help businesses sell its products. Marketing is
the management process that identifies, anticipates and satisfies customer requirements
profitably.
Market research is the collection, presentation and analysis of information and data relating
to the marketing and consumption of goods and services.
PURPOSE OF MARKET RESEARCH
A business will be more successful if it can supply products that meet customers’ needs.
The main purpose for market research is:
Identifying opportunities / gaps in the market: finding untapped1 markets is not
easy. If a business can spot a gap in the market it will definitely gain a competitive
edge.
Reducing risks: investment in effective market research can help to reduce the risk
for failure.
To inform business decisions (price of product, design, location…): market research
can provide a wide range of information that could be used to improve decision
making.
Identifying market segments2 (age, gender, religion…)
Identifying competition
Although carrying market research reduces the risk of products failing in the market, if
market research data is inaccurate or out of date, any decisions based on the data are likely
to be illogical. The reliability of the data often depends on the number of people questioned
and whether they represent the views of everyone (sample3).
PRIMARY RESEARCH (FIELD RESEARCH)
Primary research involves gathering new information that does not already exist. This is
mainly done by asking questions or by observing people’s behavior.
ADV: information gathered can be adapted to the needs of the business. The data collected
will be original, relevant, reliable and unbiased.
DISADV: time-consuming and expensive.
1
Market that is available buy has not yet been exploited
2
Part of a whole market where a particular customer group have similar characteristics
3
A small group of people, which must represent a proportion of a total market when carrying out market research
1
, METHODS OF PRIMARY RESEARCH
Questionnaires: this is a list of written questions. These are used to record the
views and opinions of respondents. A good questionnaire will have the following
features:
o A balance of open4 and closed questions5.
o Contain clear and simple questions, avoiding using jargon6, poor grammar
and bad spelling
o Not contain leading questions7. This is mainly because if not, results will be
biased
o Be short and precise. If these are too long, respondents will be reluctant to
answer them
Questionnaires can be used in a range of different situations:
o Postal surveys: these are questionnaires sent out in a letter. The majority of
these are never returned; a whole load of resources are wasted
o Telephone interviews: the main advantage of this is that is cheaper. A wide
geographical area can also be covered.
o Personal interviews: these are often carried out in the street, and the
interviewers fill the answers. The main advantage is that questions can be
explained if a respondent is confused. It may be possible to collect more
detailed information
o Online surveys: these are questionnaires sent to customers and consumer via
online systems
Focus groups or consumer panels: this is where a number of customers are invited
to attend a discussion led by market researchers. This is a relative cost-effective
method of collecting information. This can be more time-efficient than conducting
individual interviews
Observation: this is watching customers in real-life settings and situations. However,
because there is no feedback using this method, a lot of questions may go
unanswered.
Test marketing: this involves selling a new product in a restricted geographical
area to test it. After a certain period of time, feedback is gathered from customers.
This reduced the risk for failure, however is costly in both time and money.
SECONDARY RESEARCH (DESK RESEARCH)
This involves the collection on information that already exists. It has been already collected
by someone else ad may be available for other uses.
ADV: much more time-efficient and cheaper. Internal data might also be immediately
available
DISADV: information and data collected might not be what the business needs. Information
can be inaccurate, relevant, reliable or up-to-date.
METHODS OF SECONDARY RESEARCH
Commercial publications: data gathered by market researchers, which is then sold on
to businesses
Government publications: ex. Population data, economic data, unemployment….
Internal data: data from inside the business, ex. Reports, complaints, previous
research….
Competitors: annual reports, price lists, product catalogues…
Business website: business history, price lists, product information….
4
Allow respondents to completely choose their response
5
Questions that allow respondents a limited range of respondents
6
Words and expressions used in a particular profession or group of people, which may be difficult to understand for
other people outside the group
7
Those questions that ‘suggest’ a certain answer
2
