Market Research (Edexcel A Level Business)

Product & Market Orientation

• A product orientation is an approach to marketing that focuses on the characteristics of the product rather than the needs of the consumer

  • The emphasis will be on creating a product first and then finding a market

  • The business has a belief that the product is superior, i.e. it will sell itself

  • One problem with being too product orientated is that over time your business may move further and further away from what the market is looking for, thus increasing the risk of business failure

  • E.g. Gillette's razors can be classified as a product-orientated business as the business focuses on the quality of its products and regular innovations aim to increase sales

A product orientation is an approach often used by inventors who research, test and produce a product well before market research has taken place 

• Market orientation is an approach to marketing that focuses on the needs of consumers and uses this information to design products that meet customer needs 

  • Consumers are at the centre of marketing decisions

  • Products will be developed which respond to consumer needs

  • The result of market orientation is that the firm will benefit from increased demand, increased profits, and a valued brand image as its products become more desirable 

  • E.g. Universities often develop new courses based on the feedback they receive from students and employers

Market orientation aims to develop products to meet needs identified by consumers during the market research process

Primary & Secondary Market Research Data

• Market research is the objective collection, compilation and analysis of information about a market

• Effective market research will help the business 

  • To reduce risk when launching new products or entering new markets

  • Anticipate future needs and wants of consumers

  • To understand consumer behaviour 

  • To identify potential consumer demand 

  • To identify how much consumers are prepared to pay

  • To identify competitors and gauge their potential strengths and weaknesses

• Market research data can be quantitative or qualitative

  • Both forms are useful and any data analysis should ideally include a combination of the two

Primary research

• Primary research is the process of gathering information directly from consumers in the target market using field research methods such as surveys, interviews, etc

  • This gathers information that is new and does not necessarily exist in any format

Primary Research Methods

The Advantages & Disadvantages of Primary Market Research

Secondary research

• Secondary research involves the collection, compilation, and analysis of data that already exists

  • Typical methods include purchasing market reports from specialist companies or accessing government statistical portals which provide useful information

The Advantages & Disadvantages of Secondary Market Research

The use of ICT to Support Market Research

• ICT refers to information and communications technology

• It can be used to support market research in the following ways:

Company websites

• Websites allow businesses to collect primary data cheaply, e.g. tracking consumer searches and analysing customer reviews, as well as collecting secondary data about rivals, e.g. prices and special offers

• Pop-ups used on websites can also be an effective way of gathering information

Databases

• These can be used to store large amounts of customer information, e.g. Tesco loyalty cards

• Databases are also effective in collating customer e-mail addresses so that targeted customers can be surveyed later via e-mail

Social networking

• Focuses on gathering information about consumers via online social channels such as Twitter and Facebook

• It is also useful as a method of running quick polls and surveys or tracking opinions about brands

Market Segmentation

• Market segmentation is the process in which a single market is divided into submarkets, or 'segments'

  • Each segment represents a slightly different set of consumer characteristics

  • Firms often segment their markets according to factors such as income, geographical location, religion, gender, or lifestyle

• A market for a good such as crisps is not simply seen as one market e.g. the crisp market is divided up into many market segments, such as

  • Dinner party snacks (Walkers Sensations, Pringles, Burts) are targeted at middle to upper earners/professionals with a premium price

  • Health conscious crisps (Walker's lite, Walkers baked, Revita lite) are targeted at the health conscious market

  • Lunch box value snacks (multipacks, hoola hoops, etc) are targeted at families and the mass market

The Advantages & Disadvantages of Market Segmentation