Marketing Research for a Product
Marketing
What is a market?
A market is where the buyers and sellers come together to exchange money for a product of service. Market used to describe the people whom the product is sold to. This is not always selling products in person, it could be selling over the internet or even over the phone.
My market is going to be toys sold to domestic customers.
Product-orientation:
A product-oriented business is when the product is produced first, then a market is found.
Market-orientation:
A market-oriented business is when primary and secondary research is done to find a market for the product before the product is produced. This ensures the success of the product and will ensure that people want what is being produced.
My business strategy- I will have a market oriented product, as I will be marketing a product, which need market research done to ensure it is financially sound and that there is a gap in the market for this new product.
What is the point of market research?
A business must find out how many people there are and who will buy the product. This is where market research is used. Market research is used to find out:
* What types of product do people like or dislike
* If people want the product
* How much would they pay
* Where will they buy the product
* Who will buy the product
* Competition
* What promotions to use
What do I want to find out- I want to find out:
* Are people thinking of buying a different version of a toy which is already in shops
* Competition in the area
* What prices will they buy it at
* Who will buy the product
The information can be gathered by two methods:
Primary research
This is where the data is collected for a specific purpose, this involves going out and carrying out questionnaires, and interviews. This method of research can be expensive and time consuming. The methods primary research I am going to use are:
* Questionnaires
* Observations
* Experiments
Each method of primary research has advantages, and disadvantages these are:
Questionnaires
These are the most common method of primary research as it is the easiest.
Advantages
* Detailed information can be gathered
* Customers options can be obtained
Disadvantages
* To carry out a questionnaire it will take time, then it will also take time to analyse the results obtained.
* The questions must be well thought out, other wise the results will be misleading
Interviews
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* Questionnaires
* Observations
* Experiments
Each method of primary research has advantages, and disadvantages these are:
Questionnaires
These are the most common method of primary research as it is the easiest.
Advantages
* Detailed information can be gathered
* Customers options can be obtained
Disadvantages
* To carry out a questionnaire it will take time, then it will also take time to analyse the results obtained.
* The questions must be well thought out, other wise the results will be misleading
Interviews
This is when a person asks questions to a person.
Advantages
* Questions can be explained if the interviewee does not understand the question
* Very detailed information can be gathered
Disadvantages
* Interviews are very time consuming
* The interviewer may lead the interviewees answer to the questions
Observations
Observations can be in many forms these are:
Recording, a example of this is monitoring how many papers you buy
Watching, a example of this could be you watch how many people ride a bike, past a certain point
Audits, a example of this is counting how much stock there is.
Advantages
* Does not cost much to gather information
Disadvantages
* The information is not very detailed
Experiments
The best example of this type of research is when a supermarket gives out free samples of a product.
Advantages
* This is very easy to set up, and you get a customers reaction quickly
Disadvantages
* People may lie so not to hurt your feelings
* You only get the opinions of a small number of people
Secondary research
This is research that has been gathered for a other reason, and is available for anyone to use. This type of research comes in two forms external and internal.
Internal sources
This is information that has already been collected by your business, and available for other departments to use. As the information has already been collected, it is easy and cheap to use.
External sources
This is when the information is gathered outside the business. There are many source, but they vary according to what you are researching. This data has not been gathered for any specific purpose, so it is very general.
External sources are:
? Trade associations
? Specialist magazines
? Reports
? Newspapers
? Governments reports
? Media reports
This method of research is very cheap, but as it does have limitations is not always the best.
Secondary data Vs. Secondary data
What is the difference?
Primary data is data that is collected just for that specific purpose. While secondary data is data that was collected for a other purpose.
Which is better?
Primary data is better as it normally more accurate, and as it has been carried out just for your purpose it will have more specific information. Also the information that is collected is of a neutral view point.
Primary data or Secondary data- I will use primary data in my project as it will be more accurate, and will be will be of a neutral view point.
Random or quota sampling?
Random sampling
This is when every one in the country has a equal chance of being picked. People are picked at random often by computer to complete a survey. The advantage of this is that very one has a equal chance of being picked, but there is there a chance that some of the people that are picked do not use your product or service.
Quota sampling- This is where people picked to do a survey because they meet certain characteristics. These characteristics can be:
? Age
? gender
? Ethnicity
? Where you live
This is useful as the person characteristics find out what a certain group thinks, a bout any topic.
My method of research- The method that I will use is random sampling in the local area. This is so that I can see what a wide range of people think and want in the local area. This is so that I get data that is relevant to me. I will use primary research, in the form of questionnaires. This is because the primary research will be accurate, and more relevant, as it is being carried out for a specific purpose. The reason that I am using a questionnaire is that it allows to gather very detailed information. There some limitations to my research methods, the major one being that it will take a long amount of time.
What market am I aiming for?
This is very important as this effects most aspects of my business. When I say "what market aim I aiming for?" I mean am I aiming for the ultra cheap, low end of the market or the upper end of the market. To decide I will carry out research into what markets are not catered for by the large companies, I will then cater for this market. To do this I carry out questioners or use research already carried out by a other company. I will group the people on there response to some questionnaire in social grades. This is because this will help to create a image of the average wage, and class in the local area. Then I will cater for the group that the majority of people fit into.
Market segmentation
Market segmentation is a method of dividing up the market, into smaller subgroups. A example is that products like drinks may appeal to one group like young people, while a other may appeal to older men. This means that the market will broken up by age, and gender. This is very important when advertising, as different adverts will apple to different people in each group.
The most common methods of market segmentation are:
Life style
A married person with kids who has the same wage as a single person will buy different products. This means that the advertising for some products will be aimed at the single person. while some will be aimed at the married person.
Age
People of different age buy different products. This means that a old person will buy different products to a young person.
Gender
Certain products are only brought by males, and some is only brought by females, so the advertising targets that group. Sometimes the a products are brought by both groups, but the advertising is just aimed at one.
Region
People in different areas of the country will buy different products. A person in a wet part of the country will buy clothes for wet weather, while in a dry part people wont. This also applies to when a product is exported.
Income
These are created depending on a person's income. The highest in the groups are the managers while the lowest are the unemployed. A products that is to aimed art the highest income group will have a high price, while a product aimed the lowest will have a low price. This also means that the advertising campaign will be different for each group.
Use of product
A product can be used by domestic home users or business. This will influence the way the that the product is sold and advertised. If selling to a business then the company may go direct to the business and sell face to face. While if selling to the domestic ,market they may just sell over the phone. A product that is aimed at a business user may not be advertised on television, unlike a domestic. Instead brochures may be used. This means that the same product could have to different advertising campaigns.
Social grades
What are social grades?
This is a other method of segmenting the market by class. The groups are created on what the head of each home does for a living. The social grades are:
