Marketing Chapter 16 PDF

Chapter 16 - Marketing Market Research → the process of gathering and analysing information about the potential market for a product, to ensure that consumer needs...

Chapter 16 - Marketing Market Research → the process of gathering and analysing information about the potential market for a product, to ensure that consumer needs are satisfied. Benefits include: - Indicates the s ize of the market (and whether it is growing, shrinking or static) - Provides information on the consumers (age, gender, income, tastes etc) - Identifies competitors (and their strengths and weaknesses) -T ests consumer reaction to product samples, packaging and prices, and identifies which product features are important to consumers -P redict sales (likely levels and optimum amount to produce) - Improve the marketing mix before launching the product Target Market → the description of consumers that a business aims its product at. Sources of Market Research Desk Research Field Research Internal company reports Observation Reports/stats from state agencies (CSO) Customer surveys Internet Customer feedback Newspapers/magazines/articles Focus group Trade associations/interest groups Chapter 16 - Marketing Desk (secondary) Research → means accessing and analysing information that has already been gathered by others. Advantage 1. Desk research is relatively cheap which keeps business costs down, thereby ensuring a competitive business. Disadvantage 1. You can find a large amount of information which is not specific and too general. It could be biased to the person who originally conducted the research. 2. The information might be out of date/obsolete. Field research → involves going into the market place/field to gather the business information directly from customers and competitors. Sampling refers to interviewing a small group of people who are representative of the larger target market. Advantage 1. Field research allows the company to obtain accurate information. This allows them to satisfy its customer needs more effectively, encouraging customer loyalty and increasing the sales of the business. 2. Field research guarantees that the information collected is up-to-date and relevant, enabling accurate trends to be revealed. Disadvantage 1. Field research tends to be expensive and time consuming. This has a negative impact on the company’s profits. Market Segmentation → divides consumers into different groups based on common characteristics. 1. Demographic segmentation → analyses consumers according to age, income, gender, social class etc Chapter 16 - Marketing 2. Psychological segmentation → analyses consumers on the basis of their attitudes, tastes and lifestyles e.g. Mars sell protein bars for consumers who like chocolate but want more protein in their diet. 3. Geographical segmentation →  divides consumers based on different geographical areas. 4. Behavioural segmentation → divides up consumers based on how they react to certain situations. Eg. Placing chocolate bars and sweets at the till for impulsive buyers Advantages of Segmentation: 1. Create a product to target different groups of people - design a feature that will meet a specific need or a need that has been overlooked 2. Lowers marketing costs - allows a business to target the consumer more efficiently and focus on their social media preferences 3. Create multiple markets - adjust their product to create a tiered market 4. Increases profit - satisfying consumer needs will encourage repeat purchases Niche Market → a small specialised section of a larger market with only few suppliers. Implications of operating in a niche market: Chapter 16 - Marketing 1. Lower sales - smaller amount of consumers buying the product 2. Get a foothold on the market - can build a good reputation and a loyal consumers 3. High cost of production - product is not in demand, the business will need  to use job or batch production 4. Less competition - easier to attract customers Marketing Strategy → a plan setting out how a business will identify and satisfy the customer needs identified by market research. The marketing concept → the idea of satisfying customers needs; looking at consumer needs, rather than the business. The Marketing Plan (Taken from the business plan) Market Analysis Target market Market trends Competitors – what they are doing/selling? Market Research Marketing Plan 4 P’s – price, place, promotion, product