1. Meeting Customer Needs.
Market Research: Collection and analysis of market information where it can include looking at
the market as a whole, the competitors, products and or consumers within the market.
Market Share: Proportion of sales in a market made by one firm or brand, usually expressed as
a percentage.
> Market share
= sales of a product or business/ total market sales x 100%
Added Value: Increasing the difference between the cost of making the product and the price
that the customer pays. Hence increasing profit.
> Added value = Price - Cost of production
*Can be achieved by either increasing selling price or by reducing production costs. Hence gain
competitive advantage and encourage customers to pay a higher price.
Market Positioning and Mapping: laid out as a matrix where products or brands are positioned
on it according to where they are judged to lie.
Benefits:
>Reveal gaps in the market.
>Show closest competitors.
>If sales are decreasing; analyze customer view and reposition.
>Expected pricing.
Drawbacks:
>Too simplified.
> Subject to opinion and bias.
MASS MARKET: a large market with a number of customers which is not segmented into
groups based on customer needs or interests.
NICHE MARKET: a small market that has customers with specific needs or requirements.
*Businesses in mass markets sell to more consumers than those in niche markets, meaning
products sold in mass markets can be cheaper to produce than those sold in niche markets.
*Businesses in niche markets can be riskier as they sell to a smaller number and narrower
range of customers.
*Mass markets have a larger market size than niche markets, but each business within a mass
market is likely to have a smaller market share than each business within a niche market.
*In mass markets, there are businesses selling similar products, so there is more competition
which means businesses in mass markets might focus more heavily on strong branding.
,Market Dynamics:
*Markets can change in a variety of ways:
>consumer preferences
>innovation
>the way in which customers want to shop, e.g. online shopping competitors
>changes in legislation.
*Businesses need to adapt to changes in the market in order to be successful and maintain
their market share and demand.
Competitive Advantage:
A condition which allows a firm to generate more sales or be more profitable than its rivals. To
achieve it, a firm needs to be doing something different to its rivals:
>Lower costs – producing a product but at a lower cost means a firm can charge a lower price
for its product, which should generate more sales.
>Product innovation – by producing new and unique products that consumers want to buy,
sales will increase.
>Advertising and marketing – the more a firm advertises its products and markets it to make it
attractive to buyers, the more likely it is to generate sales.
>Product differentiation – where firms distinguish their products from rivals.
>Reliability and quality - businesses can maintain a good reputation if it sells products
that is reliable and better quality where it would enable them to charge higher prices.
>Good customer service – polite and knowledgeable staff can make a customer
likely to make a purchase and more likely to make repeat purchases in the future.
>Convenience - anything a firm can do to make the buying experience quicker and easier will
attract customers.
Market Segmentation:
Dividing a market into identifiable segments in which consumers share one or more
characteristics.
>Demographic - e.g. age, gender, socio-economic class.
>Geographic - e.g. neighborhood, city, county, country, or world region.
>Income - e.g. luxury products are usually aimed at high income groups.
>Behavioural - e.g. amount of use, lifestyle, hobbies, and interests.
PRIMARY MARKET RESEARCH:
when a business does market research by gathering new information that does not exist.
>Methods include questionnaires, surveys, observations, interviews and focus groups.
Primary data is needed to find out what consumers think of a new product or advert.
>Primary data is specific to the purpose it is needed for.
>Primary data is exclusive to the firm who researched it, so
competitors cannot benefit from it.
>However, primary research is labor intensive, expensive, and
slow.
, SECONDARY MARKET RESEARCH: when a business does market research using data that is
already available and exists.
>Secondary data includes information from government publications, reliable internet sources,
trade magazines and market reports.
>Secondary data is much easier, faster, and cheaper to get hold of than primary data.
>Secondary data collected for a different reason may be unsuitable. It may have errors or be
out of date.
>Secondary data is often used to get an initial understanding of a market. A firm may then do
more specific primary research to investigate any issues or problems that are shown by the
secondary data.
QUANTITATIVE RESEARCH: research producing numerical statistics. It often uses multiple-
choice questionnaires with closed questions because they have fixed, predetermined answers.
BENEFITS DRAWBACKS
More cost effective Less detail
Objectivity and accuracy Artificiality
Faster and easier Limiting
QUALITATIVE RESEARCH: research based on the opinions of customers/consumers. It often
involves open questions where the answer is not restricted to multiple-choice questions.
BENEFITS DRAWBACKS
Provides depth and detail Time consuming
Encourages discussion More difficult to generalize
More flexibility Skillful researchers needed.
The most effective type of market research combines both qualitative and quantitative research:
>Using qualitative data to identify issues or obtain information on variables not found in
quantitative surveys.
>Generating hypotheses from qualitative research that can be tested by taking a quantitative
approach.
>Using qualitative data to better understand unexpected results from quantitative data.
2. The Market.
Market Research: Collection and analysis of market information where it can include looking at
the market as a whole, the competitors, products and or consumers within the market.
Market Share: Proportion of sales in a market made by one firm or brand, usually expressed as
a percentage.
> Market share
= sales of a product or business/ total market sales x 100%
Added Value: Increasing the difference between the cost of making the product and the price
that the customer pays. Hence increasing profit.
> Added value = Price - Cost of production
*Can be achieved by either increasing selling price or by reducing production costs. Hence gain
competitive advantage and encourage customers to pay a higher price.
Market Positioning and Mapping: laid out as a matrix where products or brands are positioned
on it according to where they are judged to lie.
Benefits:
>Reveal gaps in the market.
>Show closest competitors.
>If sales are decreasing; analyze customer view and reposition.
>Expected pricing.
Drawbacks:
>Too simplified.
> Subject to opinion and bias.
MASS MARKET: a large market with a number of customers which is not segmented into
groups based on customer needs or interests.
NICHE MARKET: a small market that has customers with specific needs or requirements.
*Businesses in mass markets sell to more consumers than those in niche markets, meaning
products sold in mass markets can be cheaper to produce than those sold in niche markets.
*Businesses in niche markets can be riskier as they sell to a smaller number and narrower
range of customers.
*Mass markets have a larger market size than niche markets, but each business within a mass
market is likely to have a smaller market share than each business within a niche market.
*In mass markets, there are businesses selling similar products, so there is more competition
which means businesses in mass markets might focus more heavily on strong branding.
,Market Dynamics:
*Markets can change in a variety of ways:
>consumer preferences
>innovation
>the way in which customers want to shop, e.g. online shopping competitors
>changes in legislation.
*Businesses need to adapt to changes in the market in order to be successful and maintain
their market share and demand.
Competitive Advantage:
A condition which allows a firm to generate more sales or be more profitable than its rivals. To
achieve it, a firm needs to be doing something different to its rivals:
>Lower costs – producing a product but at a lower cost means a firm can charge a lower price
for its product, which should generate more sales.
>Product innovation – by producing new and unique products that consumers want to buy,
sales will increase.
>Advertising and marketing – the more a firm advertises its products and markets it to make it
attractive to buyers, the more likely it is to generate sales.
>Product differentiation – where firms distinguish their products from rivals.
>Reliability and quality - businesses can maintain a good reputation if it sells products
that is reliable and better quality where it would enable them to charge higher prices.
>Good customer service – polite and knowledgeable staff can make a customer
likely to make a purchase and more likely to make repeat purchases in the future.
>Convenience - anything a firm can do to make the buying experience quicker and easier will
attract customers.
Market Segmentation:
Dividing a market into identifiable segments in which consumers share one or more
characteristics.
>Demographic - e.g. age, gender, socio-economic class.
>Geographic - e.g. neighborhood, city, county, country, or world region.
>Income - e.g. luxury products are usually aimed at high income groups.
>Behavioural - e.g. amount of use, lifestyle, hobbies, and interests.
PRIMARY MARKET RESEARCH:
when a business does market research by gathering new information that does not exist.
>Methods include questionnaires, surveys, observations, interviews and focus groups.
Primary data is needed to find out what consumers think of a new product or advert.
>Primary data is specific to the purpose it is needed for.
>Primary data is exclusive to the firm who researched it, so
competitors cannot benefit from it.
>However, primary research is labor intensive, expensive, and
slow.
, SECONDARY MARKET RESEARCH: when a business does market research using data that is
already available and exists.
>Secondary data includes information from government publications, reliable internet sources,
trade magazines and market reports.
>Secondary data is much easier, faster, and cheaper to get hold of than primary data.
>Secondary data collected for a different reason may be unsuitable. It may have errors or be
out of date.
>Secondary data is often used to get an initial understanding of a market. A firm may then do
more specific primary research to investigate any issues or problems that are shown by the
secondary data.
QUANTITATIVE RESEARCH: research producing numerical statistics. It often uses multiple-
choice questionnaires with closed questions because they have fixed, predetermined answers.
BENEFITS DRAWBACKS
More cost effective Less detail
Objectivity and accuracy Artificiality
Faster and easier Limiting
QUALITATIVE RESEARCH: research based on the opinions of customers/consumers. It often
involves open questions where the answer is not restricted to multiple-choice questions.
BENEFITS DRAWBACKS
Provides depth and detail Time consuming
Encourages discussion More difficult to generalize
More flexibility Skillful researchers needed.
The most effective type of market research combines both qualitative and quantitative research:
>Using qualitative data to identify issues or obtain information on variables not found in
quantitative surveys.
>Generating hypotheses from qualitative research that can be tested by taking a quantitative
approach.
>Using qualitative data to better understand unexpected results from quantitative data.
2. The Market.
