Page 156 - Cambridge IGCSE Business Studies

Cambridge IGCSE Business Studies Section 3 Marketing

■ Products that meet the needs of consumers are likely to last longer in the market
than goods which have been produced using a product-orientated approach. This
leads to higher sales and profits.

Uses of market research information
Market research information can be used by a business to:

■ Identify consumer needs. This reduces the risk when developing and launching new
products because the product has been designed and produced based on the market
research information provided by potential consumers of the product.
■ Discover the current and future market size for the product.
■ Provide information about the business’s existing products and markets.
■ Identify the strengths and weaknesses of competitor products. This information can
be used to make sure that any new product development builds on the strengths of
competitor’s products while improving on the weaknesses. The aim is to produce a
better product than competitors and lead to a successful launch of the product into
the market.
■ Decide on how to price the product, promote the product and how best to
distribute the product to customers.
■ Predict how changes and trends in consumer tastes and fashion may aff ect the
future demand for products.
Primary research and secondary research

The collection of market data can be divided into two main types:
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■ Primary research (sometimes called field research) involves collecting data
KEY TERMS
first-hand, for example interviewing people in the street about their views on local
Primary research: the shopping facilities. This is data collected by an organisation for the first time and for
collection of first-hand data for
its own specific needs.
the specific needs of the firm.
■ Secondary research (sometimes called desk research) uses data that already
Secondary research: the
exists, for example data that a business holds in its records about existing
collection of data from second-
hand sources. customers. However, most secondary data has usually been collected by another
organisation and for a diff erent purpose.

The most commonly used sources of secondary data are shown in Figure 11.1.

Internet

Market
research Government
agencies publications
Sources of
secondary
market
research data

Newspapers
Local library and
magazines
Internal
business
records
Figure 11.1 Sources of secondary
market research data