8590628
Description
Flashcards by Ashleigh-Jade Jones, updated more than 1 year ago
|
|
Created by Ashleigh-Jade Jones
over 7 years ago
|
|
| Question | Answer |
| Understanding the Market: (Is it a...) | -Local market (local area it operates in) -National market (across the country) -International market (overseas) -Physical market (physical) -Electronic market (online) |
| Understanding the Market: (is the market...) | -New -Growing -Saturated -Seasonal -B2B (business to business) -B2C (business to consumer) |
| What Do You Want To Find Out: | -target audience -price points -competitors -likely demand |
| Market Analysis: (what do they need to analyse) | market size market trends sales growth market growth market share market mapping |
| Market Mapping: | compares two key features of products or trends that are important to customers e.g. price & quality (to see potential gaps in market and to compare their products to rivals) |
| Market Mapping: |
-identifies gaps
-where close competitors are
-how many competitors there are
Image:
Download (image/png)
|
| Market Research: | The collection, analysis and evaluation of data Quantitative: collection of numerical data Qualitative: more human data (opinions/ideas/attitudes/feelings) |
| Types of Market Research: (Primary) | new information gathered first hand by the business itself Methods: -questionnaires -surveys -interviews -observations -focus groups Advantages: -reliable (specific to business/product itself) -time (up to date) Disadvantages: -might be expensive -interviewer bias |
| Types of Market Research: (Secondary) | existing data and information gathered by someone else Methods: -internet (online research) -books -reports/studies (specific to business) -government publications -newspapers -reviews Advantages: -less time consuming -extensive (large sample) Disadvantages: -could be inaccurate/out of date |
| Sample: | a group of respondents whose views, characteristics and behaviour represent the overall target market. a representative sample is required (similar characteristics e.g. age, income, gender, geography) |
| Sampling Methods: | Random sampling: -anyone/everyone has equal chance of selection -respondents picked at random Quota sampling (most useful): -respondents represent your target market Stratified sampling: -population is divided into groups (strata's) -respondents selected randomly |
| Choice of Sampling Method/Size: | Depends on: -time -cost -stage of life cycle (new/existing product) -market position (mass/niche) target audience and their characteristics |
| Advantages/Disadvantages of Sampling: | Advantages: -Keeps costs down -saves time Disadvantages: -hard to get representative sample -interviewer bias may occur |
| Interviewer Bias: | Dark/Milk chocolate: (None) Do you prefer dark or milk chocolate? (Irrelevancy) What's your favourite type of chocolate? (Bias) My favourite is milk chocolate, what's yours? |
| The Key to Valuable/Reliable Market Research: | -representative of target market -large enough sample size -free from interviewer bias |
| Interpreting Market Data: | -Correlation: how closely two variable link (positive/negative/no correlation, line of best fit) -Confidence intervals: a margin of error for sample results (the more representative the sample, the greater the confidence level, smaller interval) -Extrapolation: continuing past patterns or trends into the future (predicting sales trends based on past data) |
| Correlation Examples: | +Research & development spending, innovation (no. new product launches) +Staff training, productivity/customer service quality +Consumer income, sales -Price increases, demand |
| Coefficient of Correlation: | Positive (+!) Inbetween weaker and stronger correlation Negative (-1) |
| Using IT to Analyse Market Data: | Advantages: -processed/analysed quickly -construct customer databases Disadvantages: -trends could be misunderstood -hard to analyse lots of information |
| Price Elasticity of Demand: (PED) | the degree to which demand will change in response to a change in price % change in quantity demanded / % change in price = PED *>1 = ELASTIC (demand changes with price) e.g. chocolate *<1 = INELASTIC (demand relatively unresponsive to price) e.g. cigarettes |
| Price-Elastic Product: | -Characteristic: undifferentiated (many competitors) -Price cut: sales rise, revenue rises -Numerically: between -1 & -5 or more Price rise: sales fall, revenue falls |
| Price-Inelastic Product: | Characteristic: Differentiated (few competitors) Price cut: sales rise but not much so revenues fall Numerically: between -0.1 & -0.99 Price rise: sales fall but not by much so revenue rises |
| Extra Points: | -If there is no direct competition, PED is lower meaning the price can be pushed up without losing too many customers -low price elasticity if there is high brand loyalty e.g. Coca Cola |
| Why know PED: | -part of market analysis -identify how changes in price affect demand -forecast future demand in relation to price changes |
| % Change: | (original figure - new figure / original figure) x100 = % change |
| Income Elasticity of Demand: (IED) | the measure of what degree demand will change in response to change in consumer income % change in quantity demanded / % change in income *>1 = ELASTIC (demand changes with income) luxury goods e.g. holidays *<1 = INELASTIC (demand doesn't really change with income) necessities e.g. bread, milk *Unitary = income change is cancelled out by demand change |
| Inferior Goods: | negative figure as demand will fall as income increases e.g. own brands are replaced with branded goods |
| Test Marketing: | replicates all elements of a product launch to provide feedback of success without wasting a huge amount of money in investment Benefits: -sales results can be used to inform decisions -minimise risk as less cost wastage -generate feedback Drawbacks: -tastes in one area may not represent whole market -can be costly and time consuming -might give competitors time to respond |
Want to create your own Flashcards for free with GoConqr? Learn more.