Market Research: The Purposes Of Market Research (Copy)
3.2.1 The Purposes Of Market Research
Identification Of Main Features Of A Market: Size, Growth, Competitors
- Market Size
- Definition: The total value or volume of sales in a market over a period of time.
- Importance:
- Determines revenue potential.
- Helps assess whether entry or expansion is worthwhile.
- Guides resource allocation.
- Example: The smartphone market worth billions annually shows potential for new entrants.
- Market Growth
- Definition: The percentage change in market size over time.
- Formula:
Market Growth (%) = ((Current Size – Previous Size) ÷ Previous Size) × 100 - Importance:
- Indicates market attractiveness.
- High-growth markets offer expansion opportunities.
- Declining markets suggest the need for diversification.
- Example: Streaming services show rapid growth, while DVD sales are in decline.
- Competitors
- Market research identifies who competitors are, their strengths, weaknesses, strategies, and market share.
- Importance:
- Helps businesses differentiate products.
- Guides pricing, promotion, and positioning strategies.
- Example: Pepsi analyses Coca-Cola’s campaigns to adjust its own strategies.
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change AS Level Business Full Scale Course
Identification Of Customer And Consumer Characteristics, Profiles, Wants And Needs
- Customer vs Consumer
- Customer: The person/organisation buying the product.
- Consumer: The end user of the product.
- Example: A parent (customer) buying toys for a child (consumer).
- Customer And Consumer Characteristics
- Demographic factors: Age, gender, income, education, occupation.
- Geographic factors: Location, climate, region.
- Psychographic factors: Lifestyle, values, personality.
- Behavioural factors: Buying frequency, brand loyalty, benefits sought.
- Customer Profiles
- Detailed description of the target customer.
- Example: A gym targeting young professionals aged 25–35, urban, health-conscious.
- Benefits:
- Provides clarity for marketing strategies.
- Helps design personalised products and promotions.
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change AS Level Business Full Scale Course
- Identification Of Wants And Needs
- Needs: Essential requirements (food, housing, security).
- Wants: Desires shaped by culture, personality, and lifestyle.
- Market research identifies gaps between what customers need and what is available.
- Example: Need = healthy drink; Want = flavoured vitamin water.
- Importance Of Understanding Wants And Needs
- Guides product development and innovation.
- Improves customer satisfaction and loyalty.
- Helps avoid product failure due to misjudging demand.
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change AS Level Business Full Scale Course
Strategic Importance Of Market Research
- Reduces risk by providing evidence for decision-making.
- Allows businesses to anticipate customer behaviour and industry trends.
- Helps segment markets and choose target audiences.
- Supports long-term competitiveness by aligning marketing strategies with customer expectations.
- Example: Netflix uses market research to decide which shows to produce, based on viewer preferences.
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change AS Level Business Full Scale Course