Market Research

1. What is Market Research?

Market research involves gathering, presenting, and analyzing information
about the market and the consumption of goods and services. It helps
businesses identify customer needs and market trends.
Purpose of Market Research
• Identifying customer needs and wants
• Reducing business risks
• Improving decision-making
• Identifying market opportunities
• Enhancing customer satisfaction and loyalty
2. Methods of Collecting Market Research
Primary Research (Field Research)
Involves collecting new data that has not been gathered before.
Methods:
• Surveys/Questionnaires – Structured questions to gather customer
opinions
• Focus Groups – Discussions with selected customers to gain insights
• Observations – Watching customer behavior in a particular setting
• Interviews – One-on-one discussions to gather in-depth insights
Advantages:
• Up-to-date and specific to business needs
• Provides unique data competitors don’t have
• Direct interaction with customers
Disadvantages:
• Time-consuming and expensive
• Potential bias in responses
• Limited sample size
Secondary Research (Desk Research)
Uses existing data that has already been collected by others.
Sources:
• Internet
• Government statistics (e.g., census data)
• Company reports
• Trade associations
• Books and newspapers
Advantages:
• Quick and cost-effective
• Access to large amounts of data
• Useful for trend analysis
Disadvantages:
• May be outdated or inaccurate
• Data may not be specific to business needs
• Competitors also have access to the same data
3. Qualitative vs. Quantitative Data
Qualitative Data
• Focuses on opinions, judgments, and attitudes
• Collected through interviews, focus groups, and open-ended survey
questions
• Example: Students at a school prefer plain chocolate over caramel
due to messiness
Quantitative Data
• Numerical data that can be statistically analyzed
• Collected through surveys, questionnaires, and analytics
• Example: 34% of students like chocolate
4. Importance of Market Research
Reliability and Validity of Data
• Reliability – Ensures consistency in results; data should be representative
of the population.
• Validity – Ensures accuracy in data collection; research should be free
from bias and errors.
Benefits to Businesses
• Reduces the risk of failure
• Helps in launching new products successfully
• Allows better targeting of customers
• Helps businesses make informed decisions
5. The Role of Social Media in Market Research
Social media is a valuable tool for both primary and secondary research.
Ways Businesses Use Social Media for Market Research:
1. Monitoring customer feedback and sentiment analysis
2. Conducting surveys and polls
3. Analyzing trends and consumer behavior
4. Tracking competitor activities
5. Engaging with customers to improve brand image

6. What is a market? Provide examples.

A market is a place, either physical or virtual, where buyers and sellers interact
to exchange goods and services. Examples include online marketplaces,
shopping malls, and local markets.

7. How would you define marketing in simple terms?

Marketing is the process of understanding what customers need and
want, then creating and promoting products or services to fulfill those
needs profitably.
8. Why is marketing important for a business?
Marketing helps businesses attract and retain customers, build brand
loyalty, and stay competitive by responding to market trends and
customer preferences.
9. Compare and contrast Product Orientation and Market Orientation.
10. Product Orientation: Focuses on developing high-quality products first,
then finding customers to buy them.
11. Market Orientation: Prioritizes understanding customer needs and
creating products based on market demand.
12. Explain how market share is calculated and why it is important.
Market share is calculated by dividing a company's sales by the total
industry sales during a given period. It helps businesses understand their
position in the market and evaluate competition.
13. What are the key components of market analysis?
Market analysis involves assessing market size, growth trends, customer
behavior, competitive landscape, external influences, and profitability
to help businesses make informed decisions.
14. What is niche marketing? Discuss its benefits.
Niche marketing targets a specific, well-defined customer segment. It
allows businesses to cater to unique customer needs with less
competition and stronger customer relationships.
15. What is mass marketing? What challenges does it present?
Mass marketing aims to sell a single product to a large audience using
the same marketing approach. While it offers higher sales potential, it
also involves intense competition and high marketing costs.
16. How can businesses effectively respond to market changes?
Businesses must stay adaptable by conducting market research,
analyzing customer trends, and adjusting their strategies quickly to
meet changing demands and competitive pressures.
Market Segmentation Market segmentation is the process of dividing a
broad consumer or business market into sub-groups of consumers based
on shared characteristics. This helps businesses to better target and meet
the needs of different groups. The key methods of segmentation include:
• Geographic Segmentation: Dividing the market based on location,
such as country, city, or climate.
• Demographic Segmentation: Based on factors such as age, gender,
income, education, and family size.
• Lifestyle (Psychographic) Segmentation: Based on personality, values,
interests, and lifestyles.
Benefits of Market Segmentation:
• Better understanding of consumer needs
• Improved competitive positioning
• Increased sales and market share
• More effective marketing strategies

Product A product is a good or service offered to the market. Marketing

involves having the right product, at the right place, price, and time.
The Marketing Mix (4Ps):
• Product: Development of the product, ensuring it meets customer
needs.
• Price: Choosing the correct pricing strategy.
• Place: Deciding where and how to distribute the product.
• Promotion: How to inform and persuade customers to buy.
Product Life Cycle Stages:
1. Introduction – High costs, low sales, heavy promotion.
2. Growth – Increasing sales, improving profits, brand recognition.
3. Maturity – Peak sales, competitive pricing, and stable profits.
4. Decline – Falling sales, potential withdrawal from the market.
Extension Strategies:
• Modifying the product (e.g., new design)
• Finding new markets
• Changing packaging
• Offering discounts or promotions

Price Pricing strategies are essential in attracting customers and

maximizing profits.
Common Pricing Strategies:
• Cost-Plus Pricing: Adding a markup to the cost price.
• Penetration Pricing: Setting a low initial price to attract customers.
• Competitive Pricing: Pricing based on competitors’ rates.
• Price Skimming: Setting a high price for a new, innovative product.
• Psychological Pricing: Pricing to influence perception (e.g., AED 1.99
instead of AED 2).
• Promotional Pricing: Short-term discounts and special offers.
Destroyer (Predatory) Pricing:
• Lowering prices to eliminate competitors, then raising them later.

Place (Distribution) Place refers to how products are distributed to

consumers.
Distribution Channels:
• Retailing: Products sold through supermarkets, department stores,
online retailers, etc.
• Wholesaling: Bulk selling to retailers or businesses.
• Direct Selling: Selling directly to consumers.
• E-Commerce (Online Selling): Selling through websites and apps.
• Agents/Brokers: Intermediaries who help distribute products.
Factors Affecting Distribution Choice:
• Nature of the product (e.g., perishability, bulkiness)
• Cost considerations
• Market type (mass or niche)
• Level of control required by the business

Promotion Promotion involves communication strategies to inform,

persuade, and remind customers about a product.
Above-the-Line Promotion (ATL): Mass media advertising, including:
• Television: High reach but expensive.
• Radio: Cheaper but lacks visuals.
• Newspapers & Magazines: Detailed but less engaging.
• Billboards/Posters: Good for visibility, limited space for details.
• Cinema Ads: High impact but limited audience.
• Internet Advertising: Cost-effective, large audience reach.
Below-the-Line Promotion (BTL): Targeted, direct marketing, including:
• Direct Mailing: Sending promotional materials via post.
• Sales Promotions: Discounts, coupons, BOGOF (Buy One Get One Free).
• Personal Selling: Face-to-face sales interactions.
• Exhibitions & Trade Fairs: Direct engagement with potential customers.
• Merchandising & Packaging: Creating appealing product displays.
Public Relations (PR): Managing a company’s reputation through media,
sponsorships, and events.
Branding: A strong brand builds customer loyalty and differentiates
products in the market.

Technology in Promotion:
• Online advertising and social media campaigns.
• Influencer marketing.
• Email marketing and personalized promotions.