Please answer the questions set

on your handout. If you are in

a group, please ensure all group
members contribute to the
decisions. Questions with
Welcome to further reasons will be asked
after the session.
our product analysis If you have been allocated to
session work alone, please ensure the
answers are purely your own
and not influenced by others
around you.
 112 Market Research
AS Edexcel New Specification 2015 Business

By Sarah Hilton for

 From the specification
a) Product and market orientation
b) Primary and secondary market research data
(quantitative and qualitative) used to:
identify and anticipate customer needs and wants
quantify likely demand
gain insight into consumer behaviour
c) Limitations of market research, sample size and bias
d) Use of ICT to support market research:
websites
social networking
databases
e) Market segmentation
Guidance from
Edexcel
Guidance from
Edexcel
 Starter
• When you buy your first car – what colour will
it be?

• What if there was only one colour for all cars?

 Lesson Objectives
 To be able to discuss product and market orientation
 To be able to identify uses for primary and secondary
market research data
 To be able to explain limitations of market research
 To be able to describe uses of ICT to support market
research
 To be able to discuss market segmentation

 To be able to answer sample exam questions based on

the topic area
PRODUCT AND MARKET
ORIENTATION
 Product orientation
• Definition: The product is By 1918, half of all the cars in
the US were Model Ts. However,
the most important factor it was a monolithic bloc; Ford
wrote in his autobiography that
when providing products in 1909 he told his management
team that in the future “Any
for a market customer can have a car painted
any color that he wants so long
as it is black”*
Production Orientation Examples

Apple produce
innovative products

Gillette produce blades for

razors
 Market orientation
• Definition: The
consumer is the
most important
factor when
providing products
for the market, the
business has a
sensitivity to
customers Customise your Audi
requirements car, any engine, any
colour, any trim
PRIMARY AND SECONDARY
RESEARCH
Why would a business collect data?
Video to start 2 mins 14 (mute sound)
• To assess potential demand for a product
or service, to see if it will sell, and if so,
how much.
• To see which promotions would best suit
a launch of the product or service e.g.
Introductory price
• To assess the competition, where do
potential customers shop already, do
they buy substitute or complimentary
products?
• To build a customer profile (and here)
• Dominos pizza found that more pizza was
ordered when it rained, so now it links its
promotions to weather forecasts
 Benefits to a business of researching their
market
• For decision making, reduces risk and cost of
making poor decisions
• To develop a marketing plan based on data
gathered about the 4Ps (e.g. where the best
place to sell is to reach the target audience)
• To react to and prepare for changes in the market
(See the wall decals and frozen dress up outfit)

• To become market orientated

What is a primary research?
• Primary research is original data
gathered by the researcher
• The information does not yet exist, so it
could not be found on the Internet, the
business website or anywhere else
• This is brand new data which the
business will gather about their product
or service
• They will use this data to make specific
decisions about the business; perhaps a
new product or a new market
 Primary research methods
Questionnaires (surveys)
Interviews
Observation
Loyalty cards
Focus groups
Consumer panels
Test marketing
 Primary
research -
Survey
• Primary research may also include
a survey of customers who use the
business. Work out what questions
you want to ask first
• A business can gather quantitative
(numbers) and qualitative data in
this method
• It can also be used to measure
customer satisfaction – giving the
business a clear idea of where to
imporve
 Primary research –
interview
• A primary research team may carry out interviews.
Either with the owner, with customers or with suppliers.
– This will gauge reactions to new tastes or ideas that the
business is having
– Because it is primary research this will be very specific to the
needs of the company – where secondary research will just
be general
 Primary research - Observation
• A business may choose to
gather data from
observation of buyer
behaviour
– Do customers shop alone or
in groups?
– Do customers notice
carefully placed promotions?
– What route do customers
take round a store?
 Primary research –
Loyalty cards
• Purchases on store cards can be used to track
consumer buyer behaviour and further micro
market to customers specific offers. Because
the offers are well targeted customers are
more likely to take up any promotions. This
makes the marketing very cost effective.

• Other loyalty cards (like a card stamp for a

coffee) act as incentive for customers to
return. Useful for repeat business, but not
research as you do not get the customer
details for these sorts of cards.
 Primary research –
focus group
• A group of target market
demographic respondents are
chosen to take part in a
product trial.
• They may use the product over
time and then get together in a
group to discuss their thoughts
about the product
• This gives the business very
specific qualitative information
about how customers relate
and “feel” about the product.
 Primary research – consumer panel
• This is a group of experts who have been selected by an agency
to answer a series of responses to questions about a product or
service.
• These are usually independent experts rather than being
members of the general public
• The panel may carry out their own research into the needs of the
target consumer, they look at issues through the eyes of a
consumer
 Primary research -
test marketing
• A business may invent, produce or buy in a new
product.
• All staff in the business may agree that these
are good products, but they need to know if
the wider public will buy them in the quantity
they need to break even and make a profit.
• Therefore the product is offered to a carefully
chosen sample, and based on the sample’s
reactions the product will either be launched
full scale or scrapped.*
 Secondary research methods
Annual reports
Internal data
Government Sources
News
Trade Journals
Specialist organisations’
publications
EU and International
sources
 Secondary research –
annual reports
• It may be useful for a business to look at their
previous annual reports or even those of their
competitors
• An annual report is required if a business is a
limited company or a plc
• It will have such information as balance sheet
and profit and loss statement
• An annual report gives investors a good idea
about the financial health of the business, so
they can decide whether or not to risk investing
• See example report from M&S
 Secondary research –
internal data
• A business may have collected a wealth of data over a number of
years of trading
• Sales figures are very useful for forecasting future sales
• The business May have built up a database of loyal customers who
can be targeted with future campaigns and promotional offers
Secondary research – government sources
• Office of national statistics (ONS) is very useful demographic
information and data on the market or industry that the business is in.
• Information can be used to make decisions about expanding overseas
for example.
• DBIOS Department for business, innovation and skills has information
on exporting and grants
 Secondary research - news
• If a business is
considering launching a
new product or even
looking for new
markets for the old
product, they may turn
to the news media for
help.
• For example a handbag
manufacturer would be
very interested in this
video from the bbc
news business website
Secondary research
–
trade journals
• Trade journals cater to
a very specialist market
• Information on
competitor activity
such as promotions
• News specific to the
industry
• Helps small businesses
stay in touch with
trends in the market
• E.g. Architects Journal
 Secondary research – specialist organisations’
publications
• Mintel trends and reports – Mintel has a
global team of trend analysts constantly
assessing change in culture, economy and
society.
• Reports cost £1,000 - £3,000
• Below is from the website and outline how
the secondary data can be used:
“Where you can turn to stimulate creative thought
Which new demographics and markets you can reach
How consumer choices and behaviours are changing – and why
What you can do to capitalise on change and get to market first
How you can better engage your customers”
 Secondary research – EU and international
sources
Eurostat contains
many useful statistics
on Europe. Could be
used by a business
looking to expand into
European markets.
Infographics help
businesses to visualise
large amounts of data
easily.

• WTO or world trade organisation (PDF here) works at lowering trade

barriers, tariffs and quotas between countries.
• IMF or international monetary fund is an organisation of 188 countries
who work to foster global monetary cooperation and reduce world
poverty amongst other functions.
• How would a business use this data? In what circumstances would a UK
business need this type of secondary research?
 Quantitative (Quantity data)
• Involves gathering data
and measuring responses
• Data displayed in charts.
Graphs, as statistics and
percentages
• Questionnaires written to
gather numerical data –
e.g. number of
respondents who…
 Qualitative (quality information)
• Seeks to gather and explore
feelings and thoughts about a
product from consumers
• Information gathered by;
– Focus group discussions
– Interview with consumers on
what they “think” about the
product or service
– Observations of buyer
behaviour (e.g. only family
groups bought the squash)
“We loved it.”
“It really worked for my
family.”
“We liked the natty
design and showed it to
our neighbour.”
“I found it easy to use
once I had read the
manual.”
“I was really pleased
with the customer
service in the shop.”
LIMITATIONS OF MARKET RESEARCH
Watch you tube: Video 4 mins
 Limitations of market research
• Research carried out did not give enough information
• The data is inaccurate or misleading
• The data (mostly secondary ) is non-specific to the organisation
• Reliability of data collected- were the same questions asked of each person, was the
sample big enough and reflective of the people who will use/buy the product would
the same results be obtained from a different set of people

•
validity reliability bias
Validity of data collected- does
it measure what it claims to
measure, is it accurate?
• Cost effective- are the costs of
carrying out the research going
to be worth while?
• Time limitations
• Budget limitations
• Asking wrong questions in
primary research gathers the
wrong data
• Reluctance of respondents to
participate in research
USES OF ICT TO SUPPORT MARKET
RESEARCH
 ICT in Market research
• Market research is all about the
gathering and analysis of data to
make decisions, computers can
be used both at the gathering
stage and at the analysis stage to
speed up the process.
• Internet data gathering is very
cost effective as it reaches all
customers using the website,
requires no staff and customers
can fill it in, in their own time.
Data is more likely to be reliable
as it is not rushed.
MARKET SEGMENTATION
 Market segmentation
• Definition: an identifiable group of individuals
(or part of a market) where consumers share
one (or more) characteristic or need
– Demographic, e.g. gender
– Geographic, e.g. Scotland, Wales, South of
England
– Behavioural, based on usage or attitude to
product e.g. Occasional, everyday
– Psychographic e.g. personality types, good with
money (safe savers), or impulsive thrill seekers
– Religion / ethnicity e.g. Halal or kosher foods
 Market segmentation - Social Class
Categorises individuals according to their occupation, a business may
decide to target ABC1 or DE consumers, depending on the product.

A Upper class – professionals e.g. lawyers, accountants

B Middle class – other professional e.g. teachers, nurses

C1 Lower middle-class – skilled non-manual workers e.g.

police, clerical staff
C2 Skilled working class – trained skilled workers e.g.
plumbers, electricians
D Working class - unskilled manual workers e.g. labourers,
farm workers
E Unskilled/unemployed - those on state benefits e.g.
pensioners, unemployed
Sample questions
 Sample question 1
4 mark question – half the marks are for context – case
study on next slide

2 marks
for
application
1 mark
for 1 mark for
knowledge analysis
Yotel website
Answer question 1
 Sample question 2
2 mark question – no context needed, just demonstrate
your knowledge and give a correct definition
Answer question 2
 Sample question 3
4 Mark question – half the marks are for context, case
study on next slide

1 marks
1 mark for for
knowledge 2 mark analysis
for
application
Vi Spring
Answer question 3
Revisionstation revision video
Revision Video
 Glossary
• Qualitative data; data gathered that is numerical such as % of customers
who buy more than once a week
• Quantitative data; non numerical data such as how customers use the
product
• Product orientation; to sell products and services that the business wants
to produce
• Market orientation; to sell products or services based on customer needs
and wants
• Primary market research; information which has to be gathered
• Secondary market research; information which already exists
• Market segmentation; a whole market can be divided into sections called
segments