A business would want to enter a growing market as their is less competition for consumers between firms, also their are more opportunities for growth and profit due to higher demands, and a greater chance for expansion.
Market segments:
an identifiable group with similar needs and wants within a market. market segments have an impact on businesses as if firms can identify particular segments they can target these and adjust their market accordingly to tailor for their needs and increase customer loyalty and profits.
Mass & Niche Markets:
A mass market is a market that appeals to the majority, and has a large customer base, examples can include supermarket chains such as Tesco. Apart from this Niche markets can be described as markets that target a specific audience and offer specialized services such as JCB work clothing which is specifically designed for builders. Niche markets can be at a higher price but are generally good quality and offer specific equipment.
Primary and Secondary re-search:
Primary re-search (field re-search) involves gathering and analysing data which has been collected for the first time.
Advantages:
- up to date
- specific to the firms needs
Disadvantages:
- may be expensive to collect
- not available immediately as it takes time to collect
Secondary research (desk re-search) involves gathering and analysing data which has already been gathered.
Advantages:
- normally cheaper than primary research
- quicker to gather than primary research
Disadvantages
- may be out of date or in an inappropriate format
- available to other firms; may be very general
Why do firms conduct market research?
Market research can be used to help firms...
- when considering the launch of a new product, a firm may want to know the size of a market
- information on customers views on an advertisement before launching can help to make sure that the 'right' advertisements are used.
- to assess how a product is doing, a firm may want to measure its sales.
Qualitative and Quantitative research:
Quantitative research is based on relatively large samples and is statistically valid. It is used to show what has happened in a market and is expressed in numerical terms e.g. sales have increased b 45% £12 million
Qualitative research is based on the opinions of a small focus group - it aims to understand why customers behave in certain ways or what they think of a product. Rather than focusing on what happened it focuses on why it happened.
A sample: is a small number of people or items which is meant to represent the target population
A confidence level: is a measure of the reliability of the findings of primary research.
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