Methods of primary and secondary market research:
Primary research is the gathering of first-hand data that is specific to a firm's needs.
You could use: surveys or observation to collect information.
Secondary research is information collected from second-hand sources such as Google, reference books, government statistics or market intelligence reports.
Quantitative research means research using pre-set questions among a large enough sample size to provide statistically valid data.
An example would be using a questionnaire to question 200 people in a particular market segment.
Qualitative research is in-depth research into the motivations behind consumer behaviour or attitudes. It may include the use of focus groups.
Should a television company commission a programme where viewers send in video clips of food eating contests.
Sampling: choosing a group of respondents selected to be representative of the target market as a whole.
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Sampling: Simple random, convenience, systematic, cluster, stratified:
Quota sampling:
The choice of sampling method and size of the sample will be influenced by:
-the finance available
-the nature of the product
-the risk involved
-the target market
What method of sampling and what sample size would you have used before bringing this product to market?
Mass marketing is attempting to sell a product or service to the 'average' customer, the whole market.
Advantages:
Cost effective because of economies of scale, proven to work, a business can build a very powerful brand.
Colgate has 45% share of the world market for toothpaste.
Colgate has 45% share of the world market for toothpaste.
Disadvantages: not personal, assumes everyones values, beliefs and needs are the same, lower profit margins.
Niche marketing: this involves targeting a product at a small, perhaps tiny segment of the market.
The A380 is the largest passenger plane in the world.
Imagine that you could afford to buy one.
How would you design the interior?
Advantages of niche marketing:
Initially there is not that much competition.
It’s unlikely that large companies are going to focus their efforts on exploring such a small segment, so a small company can have real chances in becoming successful.
Being among the first in a specific area gives you a competitive advantage.
You can create highly personalised promotion that target your exact audience.
Disadvantages:
If the market is poorly targeted then potential clients will not know about the product or service.
If there are only a few potential customers the product or service may not be viable.
If the niche proves to be profitable then larger firms may move into the market.
Market segmentation - analysing a market to identify the different types of consumer. The main ways a market can be segmented are:
Demographically e.g. by age, social class or sex
Psychographically (by attitudes and tastes)
Geographically, by region.
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