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Chapter (3) Marketing

Introduction to Marketing

Market
A set of arrangement which allows buyers and sellers to communicate and trade in goods
and services.
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Market share
The proportion of sales in a total market that a business or product enjoys.

Market share Total product or business sales x100

Total sales in the whole market
(Business aim to increase their market share at the expense of rivals.)
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Advantages of increased in market shares (increased in Sales)
1.dominate the market -- able to charge a higher price--- can get more profit
2.market leader --- The most popular band --- increased in image and reputation --- increase in
future sales.
3.higher profitability--- reinvest for expansion --- become larger --- gain EOS --- decline in
Average cost ---- can reduce the price --- more competitive.
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Ways to response to increased competition (Ways to increase market share/ sales)
1.Lower price --- willingness to buy and ability to pay increase ---- increase in sales.
2.Provide promotion and advertising. ---- well known and more attract ---
3.Provide high quality --- customer satisfaction --- loyalty --- word of mouth advertising ---
4.Provide after sales services Eg free delivery / extended warranty
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Limitation of increased in Market share (not growing --- reasons)
1)increased in competition ---- large no: of firms
2)face with recession --- (People) income decline --- D for g&s decline (less buy) ---- decreased
in Sales.
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Market leader
A business which dominate in the market.
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Marketing
A management process involved in identifying, anticipating and satisfying customer
requirements(needs) profitably.

To achieve satisfying customer needs by carrying out market research,

(i) Primary research and (ii) Secondary research.
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Marketing mix ( 4Ps )
The key decisions that must be taken by a marketing department in order to ensure the
effective marketing strategy of a product, commonly known as the 4Ps
Product, Price, Place and Promotion. (more Ps, such as people and process)

1)Product high-quality product. (must be right)

2)Price should be more than Cost --- can get profit --- reinvest for expansion /can survival
(If too high -- cost cover --- but D (sales) decrease)
(If too low --- not cover cost – so, loss)
3)Place must be available in convenient location (acceptable) (easy to access)
4)Promotion given information about product (attractive and persuade to buy )/ can create
brand mage

Conclusion
To produce or to success a product, 4 Ps need to be mix.
(P alone does not determine success as other parts of the marketing mix have to be right).
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Customer based
The group of customers who repeatedly purchase goods and services from a business.
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Four Cs
Marketing decisions that put the customer first and help to build and improve customer
relationships.

4C include
1)Customer solution (Product)
2)Cost to customer (Price)
3)Convenience to customer (Place)
4)Communication with customer (Promotion)

Advantages
1)Increased in sales --- worth of mouth advertising
2)customer loyalty --- repetitive buying

Ways to improve good customer relationship

1)Provide discount --- Price reduce --- W and A increased
2)Provide extra personal services – eg credit – convenience to customers
Use trained staff --- encourage customer service
3)Prompt respond the complaints --- quick respond --- satisfaction
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Marketing objectives
The goal set for the marketing department to help the business achieve its overall objectives.

Marketing objectives include

1.Market share --- to gain market leadership
2.Percentage of customers who are returning customers
3.Number of new customers
4.Customer satisfaction
5.Band identity and customer loyalty

Marketing strategies
A set of plans designed to achieve marketing objectives.
Long-term plan established for achieving marketing objectives.

Marketing budget
A financial plan for marketing of a product or product rage for some specified period of
time.(eg 1 year plan)
It specifies how much money is available to market the product or range, so that the marketing
department know how much they may spend.

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Mass market (large market)
Where there is a large number of sales(customers) of a product.

Niche market (small market)

A small, usually specialized, segment of a much larger market. (low number of customer)
Identifying and exploiting a small segment of a large market and developing products to fit that
segment – the opposite of mass marketing.
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Portfolio analysis
Examining the current portfolio (collection) of products to see whether it works well and
whether additional products should be added, products dropped.
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Market segmentation
Where the market has been divided up into groups of consumers who have similar needs.
Eg children market, adult market, brand market, Advertising design etc, all depends on market
segment.
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Ways of segmentation a market
1)Geographic segmentation
Based on country, weather, city or town

2)Demographic segmentation (most popular way)

By age eg. infants, teenagers, young adults ,over 65s
By gender eg. male, females
By income eg. high income people, unemployed people
By religion
By ethnicity

3)Psychographic segmentation
By social class (eg depend on occupation)
By lifestyle or personality single life / family life

4)Behavioral segmentation
Based upon their attitude, response to or use of a product
Eg home use / office use.
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Benefits of market segmentation
1.Can increase revenue --- able to tailor --- can produce customer needs and wants --- increase
in customer satisfaction
2.Avoid wasting promotional resources --- make better use of limited marketing budget --- cost
effective
3)allows price discrimination ------ Can market a wider range of goods to different customer ----
-- help to set selling price)
Helps to identify gaps in a market and to exploit them.

Limitation (disadvantages) of Market segmentation

1)Difficult to make market segment

2)Time consuming
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Usages of internet (website ) (Advantages)

1.To advertise the product
2.To search for equipment to buy
3.To compare Firm’s price with competitor’s prices
4.Online booking (customers can make a booking or payments
5.Email sent to customer

Close to the Rival firms

(+)can see competitors price
(+)Can attract customers to the area --- increase in customer

(-) Price cutting --- less profit

(-) Competitors may attract the customer --- lose customer.

there is no competition
(+) cost of Advertising and promotion decline
(+) low risk
(+) can charge high price

(-)risk high ---

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Reasons for spending on marketing is not cost effective

1)wrong target --- business target wrong people or wrong media
2)Increase in competition --- increase in substitute g&s --- consumer have more choice
3)Brand loyalty to Rival firms --- Rival has strong loyal customer ---
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Product

Product
The end result of the production process sold on the market to satisfy a customer need.

Types of products
1)Consumer product and services (g&s) produced for people
2)Producer product and services (g&s) produced for other business to use.

Consumer market
Market in which the main buyers are the general public, known as final consumers.

Industrial market
Market in which the main buyers are the firms.

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Brand name
The unique name of a product that distinguishes it from other brands.

Brand loyalty (Customer loyalty)

When consumers keep buying the same brand again and again instead of choosing a
competitor’s brand.

Brand image
An image or identity given to a product which gives it a personality of its own and
distinguishes it from its competitor’s brand.

Branding used to (Advantages)

1)Can Raise prices ---- when the brand and image become strong – can charge high price ---
higher profit – wealth creation.
2)can create customer loyalty ---- Differentiate the product from others --- can create customer
loyalty --- repetitive buying --- sales increased
3)can create sense of status ---- Help recognition --- can create sense of status and develop an
image (most popular brand)
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Packaging
The physical container or wrapping for a product.
It is also used for promotion and selling appeal.

Packaging need to be ---- (advantages)

1. Protective ---- no physical damage ---- loss reduced
2.Attractive ie this will gain customer attention --- sales increased
3.In keeping with the image of the brand name ---- can create brand loyalty --- repetitive
buying --- sales increased.

Disadvantage
1.cost will be higher --- can get lower profit or need to raise the Price --- less competitive

Packaging should be
1.At an acceptable cost – if too high --- can get lower profit / need to raise price --- less
competitive.
2.Complying with legal requirement ---- increased in compliance cost
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Target market
Individual or organization identified by a business as the customers or consumers of their
products.

Unique selling point (USP)

A special feature about a product that makes it difference to the products of competitors.

Product positioning
The consumer perception of a product or service as compared to its competitors.

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Product portfolio analysis (Product matrix) (Boston Matrix)

Analyzing the range of existing products of a business to help allocate resources effectively
between them.

STAR QUESTION
MARKS

CASH DOG
COW

Market share

Stars
high market shares and fast-growing market.
Valuable product
The cash needed for development and promotion.

Question marks (Problem child)

Market share is low and market growth rate is high.
Product hoping, they become stars Or cash cows.
Right marketing action should be taken product potential.

Cash cow
High market share in low growth market
Products are highly profitable.
mature products
Generate a steady flow of income.

Dogs
Low market shares and growth rate.
End of the life cycle
Need to replace with new product.
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Product life cycle (4 stages)

The pattern of sales recorded by a product from launch to withdrawal from the market and is
one of the main forms of product portfolio analysis.

Figure: Product life cycle

Development stage
Sales are zero or no market
Development cost --- high
Can damage the cash flow of a business. (cash outflow only)

1)Introduction stage
Product is unknown, sales are low, outlets few. Loss often made.
(Require good promotion and pricing strategies.)

2)Growth stage
Product known. Sales increased
Stage of rapid growth
Get revenue and start to recover cost
(Begins for product modifications,
way to extend the life of the product and new product to replace.)
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3)Maturity and Saturation stage

Sales are repeat orders, gain economies of scale --- average cost decline ---prices may be
reduced, Rival firms occurred.
(Looking to sell the product into other markets and to introduce product modifications.
(extension strategies) )

4)Decline stage
Product become out of date. It is a loss-making situation
Stop producing. Product will be withdrawn from the market. This is because consumer tastes
change, new technology emerges or new products appear in the market.

Extension strategies (when product === at maturity stage == use)

Methods used to prolong the life of a product.
These are marketing plans to extend the maturity stage of the product before a brand new one is
needed.

Methods
1)Modifying the product ---- customers think new product --- attention increase --- sales
increased
2)Change the appearance or packaging --- use luxury packing – can attract – existing and new
customers.
3)Finding new markets for the product --- increase in sales --- gain EOS
4)Develop the new product range --- it provides customer a wider variation of the product (more
choice for customers) .
Finding new uses for the product
Encourage more frequent use of the product.
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Reasons for short –product life cycle
1.Change in Taste and Fashion
2.Change in Technology
3.Substitute

New Product (Advantages)

1)Increased in market share ---- can Create additional customer interest --- sales will be
increased
2)can charge high selling price ----- Able to increase price if unique features --- increased in
profit
3)Reduce risks (risk diversification) ---

Disadvantages
1)Increase risk --- unfamiliar ---- mistake /quality issue (low) OR uncertain customer will like
the new product
2)cost may be higher --- capital requirement ---- can face financial difficulties.
Cost of R & D and promotion
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Recommendation
Before producing the new product, business should take Market research
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Wide range of products (Multi products)
(+) increased in Market share (sales)---- more choice --- increased in customer’s interests
(-) lack of expertise in every area --- quality may be lower ---- customer dissatisfaction
(-) risks may be higher ---require more capital investment --- increased in cost.

High quality product (Advantages)

- Increase in sales and can charge high selling price
- Good reputation and more competition
- Customer satisfaction --- increase and will keep customer happy
- Brand loyalty
- Reduce in the no: of complaints
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Seasonal demand effect on business

1)Decline in sales --- off season --- idle the asset

2)Increase in wages --- during seasonal period --- financial (capital) shortage.
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Price

Reasons for important of Pricing decision

1)To attract the customer --- P must be reasonable --- not high or low
2)In order to cover the cost-- P > Cost --- firm can get profit --- survival and growth
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Methods of setting the price (pricing strategies)
1)Cost –plus pricing (Traditional way)
The cost of manufacturing the product (allocated fixed cost and variable cost) plus a profit

Total cost + profit = Price

(+) easy to calculate --- Total cost + profit required = setting price
(+) certain to cover cost --- get profit --- survival and growth
(-) less competitive --- if P is higher than rival --- less competitive ---- loss of sales

Recommendation
There may be Other pricing method such as penetration pricing
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2)Penetration pricing
Setting a low price to start with in order to get established in the market. Price may be raised
once established.

(+) can increase MS ---- setting low price --- customer W &A increased ---- Sales increased
(-) may not cover the cost --- loss may be occur --- difficult to survive.

3)Price skimming or creaming (should use first of kind product)

Setting a high price initially and then lowering it later.
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4)Competitive pricing
The product is priced in line with or just below competitor’s prices to try to capture more of the
market.

5)Promotional pricing
A product is sold at a very low price for a short period of time (during promotional period).
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6)Psychological pricing
A particular attention is paid to the effect that the price of a product will have upon customer’s
perceptions of the product.
Eg $ 19,999
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7)Destroyer or Predatory pricing
Setting a low price until rivals have gone out of business.
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8)Market oriented pricing
Pricing strategies based upon the conditions in the market. (depend on D and S)
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9)Loss leader (may be used in out of date product)
A product sold below cost to draw in customers. (P < Cost )
Demand and Supply
Price and Qty are influenced (set) by supply(seller) and demand. (buyer)
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Demand is determined by customer
Demand is what customers are willingness and ability to buy at a given price.
IF
Price increases (expensive) --- willingness to buy and ability to pay decline ---- Qd(buy Qty)
will be decrease
Price decline (cheap) --- willingness to buy and ability to pay increased ---- Qd will be increased.
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Supply is determined by business
Supply is the amount business are willing to offer for sale at a given price
IF
Increased in Price --- get more profit ---- willing to sell more --- Qs (sell Qty) will be also
increase.
Decline in Price --- get less profit or occur loss ---- willing to sell decline --- Qs (sell Qty) will
be also decrease.
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Factors affecting the demand Factors affecting the supply
1)Changes in income 1)cost of production
2)Population 2)number of sellers
3)Advertising 3)Technology
4)Tastes and fashion 4)natural factors (weather, climate)
5)Substitute product 5)price of other goods
6)Complementary product 6)subsidies
7)Interest rate and income tax 7)Indirect tax
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Factors affecting Demand
1)If income increased (gain economic growth / unemployment decline) ---- can buy more ----
sales/ profit increased
If income decline (face with recession / unemployment increased) ---- less buy ---- sales/ profit
decreased
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2)If business spend more on advertising and promotional expenditure ---- well known / more
attract ----- sales /profit increased
If business reduce adverting and promotional expenditure --- less known/ less attract ----
sale/profit decline.

3)If product more popular ---- will buy more ----- sale/ profit increased
If product become out of date (unfashionable) ---- less buy ---- sales / profit decline.

4)If price of product increased --- will switch to buy to other substitute goods ---- less sales
If price of product reduces --- will buy more ---- increased in sales

5)If Gov increase interest rate ----- cost of borrow money high ---- borrow x ----- buy less
If Gov decrease interest rate ----- cost of borrow money lower---- borrow ----- more buy

6) If Gov increase Direct tax (income tax)----- disposable income decline ---- less buy
if Gov decrease Direct tax ----- disposable income increased ---- buy more
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Factors affecting Supply (Output Qty)

1)Cost of production increased ----- get less profit ------ will reduce their production(output) ---
sales reduce.
(L – RM price /L – w&s /K – machine rental charges )

2) business use new technology (use new machine) ---- Output increased -----

3)Gov increased Indirect tax ----- cost of material increased ---- cost of production increased ---
reduce their production

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Price elasticity of demand (PED)
Measures the responsiveness of demand following a change in price.

Price elastic demand

Where a price change will result in a significant (larger) change in demand.

Price inelastic demand (e.g. medicine)

Where a price change will result in a much smaller change in demand.

PED (Ed) %change in Qd

% change in price

Ans may be
Less than 1 = Inelastic demand product
Greater than 1 = Elastic demand Product
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Eg
The price increased from $4 to $5 and demand fell from 300 units per week to 270 units.
What is the PED?

Application of PED (Usefulness of PED) (useful for Pricing decision)

If elastic --- increased in Price ---- larger decline in Qd ----- decline in TR.
(should not increase the price) (should reduce the Price)

If inelastic --- increased in Price --- smaller decline in Qd -----increase in TR.

(should increase the price) (should not reduce the price)

So, importance for pricing decision.

Factors to be considered when setting Selling price

1.Costs of production --- P should be > cost --- can get profit ---- survival and growth
2.Competitors price --- if firm set price > Rival price --- less competitive ---loss of sales/ profit.
3.Price elasticity demand – if product inelastic D --- increased the price --- smaller decline in Qd
---- will increased TR
4.Whether it is a new or an existing product.
5.Competitive conditions in the market
6.Business and marketing objectives
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Reduced in Price (consequences)
Advantages
1) increased in demand(sales) --- if reduce the price --- customer’s willingness to buy and
ability to pay increased--- will buy more --- sales and profit increased.
2) impact on cost and stock hold --- sales increased --- holding increased --- gain Pur EOS ---
Average cost decline --- P or P

Disadvantages
1) impact on image --- cheap product --- customer think --- low quality --- decline image/ sales
2)less profit ---- low price will not cover the cost ---- less profit --- delay expansion
Recommendation
Depend on PED of products ---
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Place

Distribution channels
The route taken by a product from the producer to the customer.

(1) Direct selling

Where businesses sell their products directly to consumers.

Method of direct selling

Telephone selling, mail order catalogues, Door to door selling, direct mailing
direct response adverts ,internet

(2) Retailer
A business which buys goods from manufacturers and wholesalers and sells them in small
quantities to customers.

(3) Wholesalers
A business which buys goods from manufacturers and sell them in smaller quantities to
retailers.

(4) Agent or broker

An intermediary that brings together buyers and sellers.
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(5) Ecommerce
The process of buying and selling goods and services over the internet.

Advantages
1)increase in MS --- Access to larger market ----sales increase ------ profit also increase
2)cost may be lower ----- reduce rental charges for building ---- cost may be lower --- can reduce
the price ---- more competitive
3)24 /7 trading ---- quick respond to customer ----- satisfaction
4)Selling direct to customer --- can provide more service ---- satisfaction ---- loyalty

Disadvantages
1)Technical problem --- cost of setting up the website for e-commerce ---- can get low profit
2) Not Everyone have computer --- not everyone has access to internet and some are more prefer
the buy physically.
3)Security issue

Recommendation
Shop --- should not shut down.
Some customers want to try before they buy.
Both.

Make or Buy decision

Own production
Advantages
1) profit may be higher ---no need to apportion to others – profit amount higher --- reinvest for
expansion --- growth
2)control over quality --- product quality high ---- satisfaction ---- loyalty --- image increased

Disadvantages
1) capital investment may be increased --- increased in Capital cost ---- can face financial
difficulties
2) not have enough expertise ---- can lead to firm failure
Additional staff required
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Buying goods from Manufacturer

Advantages
1)cheap ---- cost maybe lower --- can get more profit
2)high quality --- satisfaction --- image improved / can charge high price --- more profit
3) can get credit --- free source of finance --- cost may be lower
more choice

Disadvantages
1)transport cost --- far from business --- transportation cost high --- need to raise the price ---
less competitive
2) storages cost --- need to buy in bulk --- holding cost high---- less profit
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Buying goods from wholesalers
Advantages
1)price may be lower ---- if buy bulk --- price may be lower --- cost lower ---- get more profit
2) less admin cost and more choice --- WS sell wide range of product / give advice

Disadvantages
1) need to be stored --- holding cost may be higher ---- get lower profit
2)Opportunity cost ---- need to invest in inventory --- give to spend money for other purposes

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Choice of supplier (factors)
1)Price --- Price should be lower
2)Quality --- Quality should be higher
3)Reliability – on time delivery --- if not customer dissatisfaction ---
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Choosing appropriate distribution channels

1)Nature of the product

Services (eg Education) direct selling
High quality exclusive product direct selling
Fast moving consumer goods wholesalers and retailers

2)Types of Market
selling to smaller market(niche) direct selling
selling to mass market required intermediaries
selling to overseas agent

3)Control on price and quality

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Promotion

Promotion
The use of promotional methods (“advertising, sales promotion, personal selling, direct mail,
trade fairs, sponsorship, and public relation” ) to inform consumer and persuade them to buy.

Promotion mix
The combination of promotional techniques that a firm uses to sell a product.
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Aims (Purpose) of promotion (Advantages of Promotion)
1)to attract customer can promote sales when sales are low
2)to inform people about something encourages customer to buy a product more
3)introduce new product encourages new and existing customers to try a new
product
4)To compete with competitor’s product increased in MS ---- more profit
5)To promote Brand image and company image

Disadvantages (Limitation)
1)Expensive --- cost increased ---- can get lower profit
2)difficult to measure the efficiency and effectiveness of promotion ---- difficult to measure
effectively and efficiently or not ---- lead to wastage of promotional resource.
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Informative advertising
To give full information about the product (eg computer)

Persuasive advertising
Designed to put pressure on consumers to buy a product. (pursued to buy the product)
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(I)Above- the line promotion
Placing adverts using the media
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Advantages Disadvantages
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1)Television
huge audiences can be reached very expensive --- need to raise the price
Product can be demonstrated message may be short lived – may not understand
for user
Creative adverts can have some viewers avoid TV adverts
great impact.
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2)Newspaper
national & local coverage no movement or sound
magazine
Scope for targeting with rivals’ products may be advertised
Specialist magazines as well

3)Radio
sound can be used no visual
Cheap production may be ignored
Can target youngsters can be intrusive when listing
Not everyone listens to the radio
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4)Posters & Bill boards
can produce national limited information
campaigns difficult to evaluate effectiveness
Seen repeatedly
Good for short sharp messages
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5)Internet Website
can be updated regularly possible technical problem
can be targeted security issues
hits & response can be measured there may be a lot of competition
cheap & easy to set up from other websites (confuse for consumer)
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6)flyers (leaflets)
cheap to produce might just get thrown away and
can be kept for reference not even looked at.
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7)Social networking sites
Target specific demographic confuse for customers
Guarantees target customer see advert
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(II)Below –the line promotion
1)Sales promotion
Incentives to encourage people to buy the products:
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Incentives such as special offers or special deals directed at customers or retailers to achieve
short-term sales increases and repeat purchases by consumers.
Include:
Free gifts, coupons, loyalty cards, BOGOF offers (buy one get one free), money off deals

2)Public relations
Purpose - to increase sales by improving the image of the business.
Includes
Press release, press conference, sponsorship, donations

Sponsorship
Payment by business to have its name or products associated with a particular event.

3)Free sample
(+) chance to test the taste

(-) can access limited potential customers

(-) expensive

Recommendation
There may be other methods
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4)Point of sale display
Business may arrange the point of sale so that that is interesting and eye catching and likely
to encourage sales
Include
Product layout, display material

(+) Can be demonstrated to the customer.

(-) The potential customers have to come into the shop
( if not they will not even see the product and the display)

Direct mailing

Direct selling or personal selling

A member of the sales staff communicates with one consumer with the aim of selling the product
and establishing a long-term relationship between company and consumer.

Exhibitions and trade fairs

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Choosing methods of promotion (Advertising)

1)Cost frequency of advertising

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2)Stage of life cycle --- if decline stage --- no need to advertise

3)Type of Market
niche market Local business ----- local newspaper, Yellow pages
Mass market television and national newspapers
Modernized product specialist magazines

4)Competitor’ s promotion
Copy of the method of promotion used by rival

5)Legal factors
Legislation designed to protect consumers can affect the method and style of promotion.
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Marketing or promotion budget
The financial amount made available by a business for spending on marketing/ promotion
during a certain time period.

Market research

Market research
Process of finding out what consumers want or needs before a product is made
process of gathering information from primary and secondary data on the buying habits and
attitude of potential customer.

Advantages of market research

1)Greater awareness of consumer needs ---- can adopt the products to match what customer
wants (taste and fashion) --- increase in sales and profit.
2)can produce the correct amount of product--- can avoid wastage of parts and components
(raw materials) --- lower in cost ----
3)Greater awareness of competitors’ products--- can change marketing strategy to compete
better ( can use superior marking strategies )
4)Able to forecast likely future trends --- improve focus of new products development

Disadvantages of MR
1)Expensive --- cost may be higher ---- profit lower
2) Difficult to measure the efficiency and effectiveness of MR --- wastage of expenditure
(resources) --- cost higher --- need to raise price --- less competitive.

Methods of researching the market (methods of gaining information about potential

consumers)
1. Primary research (field research)
2. Secondary research (desk research)
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Secondary market research (Desk research)

(eg business records, newspaper, internet website, Government statistical year book)
Desk research uses information that has already been found out by someone else.

Advantages
1)Cost may be lower ---The information is collected on a larger scale than a small business could
manage.
2)Save time ---- time can be saved by not having to go out and collect information from
individuals.
-
Disadvantages
1)Information can be out of date --- market is changing quickly (market dynamic) and some
data can be several years ago --- may be out of date --- not useful for business.
2)may not be specific --- The information may not be exactly ----- it was collected for another
purpose
3)The information may not be accurate
4)The information could be very expensive to obtain.
Primary research (field research)
Information that the business finds out itself from consumers.

Primary research (stages)

1. Set a budget to carry out the research
2. Need to design questionnaire
3. Draw Pilot questionnaire
4. Select the type of sample and sample size
5. Decide where to carry out the research and when
6. Go out and carry out the questionnaire
7. Collect and analyze the result
8. Produce a report.
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Method of primary market research
1)Focus groups
A form of market research where a group of people representative of the total market discuss
the product.

2)Observation
The behavior of consumers is secretly observed and recorded by market researcher.

3)Test market
A limited quantity of the produced and sold in a carefully selected area of the market.

4)Consumer surveys
The test market is chosen to represent the total market.

5)Interviews
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a) postal
b) on line survey
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Advantages for Primary MR
1)The information is up to date --- suitable for fast-changing market.
2)The information is specific to the business --- directed at potential customers, so, can get
competitive advantages with other firms
-
Disadvantages
1)expensive ---Money can easily be wasted unless the right segment of the market is questioned
2) information may be inaccurate ------ The questions must be asked very carefully or the
answers may not be valid
3)Results can be hard to analyze ---- for example if too many open questions are used. Open
questions have no choices of answer to pick from

Recommendation
Both form of research should still be used – secondary research can help to identify change in
market/ competitors’’ actions which can then be supported by well –directed primary Market
research.
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Advantages of sampling
1)Less cost and time --- information collected from selected person (not from whole population.
2)More accurate --- need to handle small quantity of information

Disadvantage of sampling
1)may not be accurate ---- Sample cannot be representative for whole population

Sampling Methods

1)Random sample
where a percentage of the market is approached with every one having an equal chance of
being asked.

2) Quota sample
where a specified number of each market segment is chosen according to the number of
people in each segment

3) Targeted sample
where a particular group of consumers is chosen and only those people asked.
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4)Stratified sample
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Analyzing the results
1)Quantitative information
Th e collection of numerical data than can be analysed using statistical techniques. This contains
results that are easily added up and can be shown on a graph and analyzed

2)Qualitative information
The collection of information about consumer buying behavior and their opinions about the
process. This given in depth to the questions asked. The information can be very useful but is
often descriptive and cannot be shown by a graph or easily analyzed.

factors which could affect the accuracy of market research

1)Type of MR
2)Type and size of sample

Presenting Market Research results.

Pie chart
(+) Good way of showing proportion
(-) if there are too many slices then it is difficult to see the relative importance of different part of
the data

Tables
(+) an effective way of presenting a lot of data very precisely
(-) too many data in the table can make it difficult for users to understand.