Pearson BTEC Level 4/5 HNC/D Diploma HND Business – Unit 17 Marketing Research Assignment
LO1 Understand buyer behaviour and the purchase decision making process
Q1.1 Describe the main stages of the purchase decision-making process for an individual consumer. (i.e. business-to-consumer).
The purchase decision making process is the process in which the consumer decides whether to buy a product or not. The organisations try to understand this process to devise best marketing strategy possible to maximize the sale of their products (Bettman, 1991). This process consists of five important stages,
In this stage the customer realizes the need of a particular type of product in his life and decides that the requirement can be satisfied only by buying the product.
In this stage, the customer researches about the range of products or services available in the market that can satisfy the need recognised in the first stage.
Evaluation of alternatives
In this stage, the customer evaluates all the alternatives found in the last stage for the product or service required to satisfy his need and chooses one which is the most suitable for him.
This stage actually consists of the process of buying the product or service and the monetary transactions associated with it.
Post purchase behaviour
In this stage, the consumer tries to evaluate his decision to buy the product or service and tries to come up with the facts supporting the purchase (Häubl, 2000).
Q1.2 Explain two theories of buyer behaviour in terms of individuals and markets.
Buyer behaviour can be defined as the processes and actions of the consumers in buying and using a product or service. There are several theories and approaches used for analysing, identifying, anticipating and evaluating the buyer behaviour of the consumers (Howard, 1969). These theories help the organisations to plan an effective marketing strategy to maximize the sale of their products or services. Two of those theories are described below.
The influence of the social culture of the consumer affects the buyer behaviour of the individual consumer and the potential buyers in the market. Different societies have different cultural values and beliefs. So there are some restrictions or preference of products and services in some markets. The products or services have to be approved by the society for it to be sold in the market. Thus the buyer behaviour of the individuals is affected by the cultural factors.
There are several personal factors that influence the buyer behaviour of the individuals. Every individual is different than the other. So the personal socio-economic status, locality and lifestyle of an individual affect the buyer behaviour (Sheth, 1973). Similarly the geographic location of the market defines some of the personal traits of the people residing there. So the personality factors of the individuals affect the buyer behaviour.
Q1.3 Explain two factors that could affect buyer behaviour.
There are several factors that influence the buyer behaviour of the individual customers. These factors are present in the market environment, personal life and society of the customers. There are four major factors that influence the buyer behaviour the most, such as cultural factors, social factors, personal factors and psychological factors (Stávková, 2008).
There are several personal characteristics or personal traits that influence the buyer behaviour of the customers. For example the decision making process of a person who loves shopping will be very different from the person who hates shopping. Another example can be given as the fact that there are people who love to go through all the alternatives available in the market and choose one depending on its price and there are some other people who just buy the product which they like the best without going through the rest of the alternatives.
As discussed earlier, the social beliefs of an individual affect the buyer behaviour to a great extent. The influence of the family, friends and surroundings of an individual on his buying behaviour is very high. For example a girl having restrictions from her family regarding the dresses can’t shop for miniskirts.
Q1.4 Evaluate the relationship between brand loyalty, corporate image and repeat purchase.
Brand is the name, symbol, status or design of a particular product of a seller that distinguishes it from the products of other sellers. Brand basically allows the organisations to place their product as the best choice in the minds of the customers (Andreassen, 1998).
After a product of an organisation is established as a brand in the market, people who give brand value a lot of importance buy prefer the product of the same brand than the others. This is called brand loyalty, which causes customers to choose one brand over all the other brands for a particular product.
This is the mental image of the people in the market about what they perceive or think of a particular organisation. The corporate image of an organisation is defined by its popularity, demand and reputation.
A consumer buying the products of the same brand as the previous purchases is known as repeat purchase. The positioning of the brand image of an organisation in the minds of people in the market is related to the corporate image in way that they are directly proportional i.e. if the brand value of a product of an organisation increases, then the corporate image of the organisation becomes stronger. Increase in brand value causes more customers to be loyal to the brand, causing increase in brand loyalty (Sharp, 1997). Increase in brand loyalty causes the loyal customers to buy the products from the same brand multiple times, causing increase in repeat purchase.
LO2 Be able to use marketing research techniques
Q2.1 Evaluate at least two different types of market research techniques.
Market research is the process which organisations use to analyse the market of their products in terms of available opportunities, present problems, established competitions and current legislations which allows them to create the most effective and efficient marketing strategy to maximize their profit (Malhotra, 2003).
Importance of market research
The role of market research in a marketing strategy is to provide the organisation with the sensitive information regarding the market and the potential buyers. The market research allows the organisations to be able to know about the opportunities along with the opposing forces available in the market. This helps the organisations to devise effective and efficient marketing strategies to sustain and succeed in the market. An effective market research methodology helps the organisation to accurately analyse, anticipate and satisfy the requirements of the customers. The marketing research techniques can be classified into two types, such as qualitative market research and quantitative market research techniques.
Qualitative research techniques
These types of techniques are generally applied to the market to explore the market and the opportunities available in it. This type of research methods are applied to a limited number of potential customers or a small group of people (Deshpande, 1982). Some of the examples are projective tests, interviews and focus groups.
Quantitative research techniques
These types of research methods are applied to conclude a fact. Some sampling methods are used to infer the general population from a sample. These types of research methods include a large number of people. Some of the examples of this type of market research techniques are questionnaires and surveys.
Q2.2 Explain how secondary sources of data can be used to achieve marketing research objectives in the marketing contexts stated below:
- A London based business-to-consumer College which intends to expand their operations within the Greater London area (covering M25)
- A Chinese Business-to-business manufacturing organisation which plans to enter the UK market.
The market research techniques require large amount of information regarding the market for the accurate results. Organisations conducting research on a particular market can gather the information themselves or can consider the information gathered by someone else. The information regarding the market which are collected, stored and managed by some organisations other than the one doing the research is called secondary data (SØRENSEN, 1996). The organisations that collect market information for the use of market research of other organisations are called secondary source of information.
- A London based business-to-consumer college which intends to expand their operations within the greater London area can use the secondary sources of data to get the information about the market. This college can get the secondary data from the pupil census, cohort studies, data collected by the department of education and national and international surveys conducted by several government and private firms.
- A Chinese business-to-business manufacturing organisation which plans to enter the UK market can also use these secondary sources of information to collect data required for the market research. The secondary data from these sources will allow the Chinese organisation to analyse the UK market for the opportunities, resources and competitions available in the market. The Chinese organisation can collect secondary data from the surveys conducted by several government and private firms, data maintained by the department of industry and several other firms.
Q2.3 Assess the validity and reliability of market research findings.
Like all the other marketing processes, market research can’t always be exactly accurate and correct. Validity and reliability are the two factors that are used very frequently to define the quality of the data gathered by the market research techniques.
This factor of the quality of the information gathered by the market research techniques defines the accuracy of the measurement (SØRENSEN, 1996). This defines the extent to which the research technique is measuring the correct factors without taking any other factor into consideration. This factor is associated with the targets of the research technique along with the design of the research technique. There are several types of validity that can be defined for a particular market research such as face validity, content validity, internal validity and external validity.
This generally refers to the consistency of the measurements done in the research techniques. In other words, this factor defines the extent to which the results of the research techniques are error-free (Moorman, 1993). If a market research technique gives same score to the same factors of the market for several times, then the results of this technique is called to be reliable.
Q2.4 Assume you work as a Marketing Executive in an organisation who wishes to launch a new product aimed at smart phone users in the UK.
The senior management team has decided to conduct both qualitative and quantitative research in the London area to test the market. You have been given the responsibility of searching for market research agencies to carry out this task.
Propose a marketing research plan to obtain information in the area. This research plan, also known as a research brief, is to be sent to three potential marketing research agencies who will respond with a detailed marketing research proposal.
Prepare this research plan.
Background: The market research plan will be sent to three potential market research agencies for a detailed marketing research proposal. The plan is for an organisation planning to launch a new product aimed at the smartphone users in the UK.
Objective of research: Determine, evaluate and analyse the current opportunities in the market for the product aimed at the smartphone users, the competitors providing the same product in the market, the demand of the product in the market and the requirement of the customers regarding the product. Determine the sale figure of the product packaged in a particular way and sold at a particular price.
Methodology: Qualitative techniques like in-depth interviews, focus groups and progressive tests can be done to analyse the market (Moorman, 1993). Quantitative techniques such as surveys and questionnaires regarding the requirement of the smartphone users can be done.
Data analysis: statistical market research tools are used to successfully analyse the data collected from primary and secondary resources.
Timeframe: The market research should be completed in three months and before the holidays to allow the organisation to plan the advertising and promotional activities at the time of the New Year.
Budget: The budget for the market research for the new product should be around ten per cent of the expected gross sales of the product.
Data: The quantitative data such as the usage of smart phones in the market and demand of the specific features in the market have to be collected. Qualitative data such as the most desirable new feature and the most anticipated model of a Smartphone have to be collected.
Expertise and experience required: The personnel carrying out the research and collecting the data should have adequate amount of experience in the conduction of surveys and questionnaires
Skills: The personnel included in the research should possess significant amount of knowledge in the field of smart phones and should understand all the features a Smartphone offers.
LO3 Be able to assess market size and future demand
Q3.1 Assess the size and the trends for a market of your choice.
The market of a particular product consists of the potential buyers of the product in a particular geographic area. The market of the product also consists of the other organisations offering the same product to the consumers as the competitors (Bettman, 1991). The market also consists of several resources that are used by the organisation to successfully carry out its marketing procedures and actions according to its marketing strategy along with its business functions.
Australia can be considered as the market for a particular product. The size of this market can be defined as the area of the country which is around 7.7 million square kilometres. The sixth largest country in the world, Australia is consists of 6 states and 2 territories.
The lifestyle of the people in the country is very good because of the low cost of living, good educational systems, good social systems and extensive beneficial plans from the government of the country. Australia is home to people of various cultural backgrounds and beliefs. So the current trends in the country are based on the good lifestyle and diverse cultural background of the population of the country.
Q3.2 For an organisation of your choice, plan and carry out a competitor analysis.
This is a process of the marketing strategy of the organisations which allows the organisations to determine, analyse and observe the current and potential competitors in the market helping them to anticipate the actions of the competitors (Chen, 1996).
This is a concept which divides the companies in a particular industry according to the similarity in business models or business strategies used by the companies. This allows the companies using similar strategies to be grouped together (Bettman, 1991). Strategic group analysis allows the companies to determine their direct competition and the basis of the competition along with the opportunities in the market.
The strategic group analysis of the company Nestle reveals its competitor to be Kraft foods. Both of them belong to the industry of coffee consumer goods and the industry group of “2095 roasted coffee”. Nestle consists of only two coffee brands which are Nescafe and Nespresso. But Kraft foods have nine different coffee brands.
Q3.3 A Chinese mobile phone manufacturer wants to enter the UK market with its new smart phone handsets. (This is a hypothetical organisation used for the purpose of assessment.)
Evaluate this organisation’s potential opportunities and threats in the UK.
A Chinese mobile manufacturer wants to enter the UK market with its new Smartphone handsets. The organisation will get some opportunities along with opposition from the Smartphone manufacturers currently holding shares in the UK market.
Market: The number of cell phone users in the UK is increasing day-by-day. The current figures suggest that half of the cell phone users in the UK are using Smartphone. Apple is holding the highest market share in the UK which is almost 30 per cent of the Smartphone market with its iPhone range. Samsung and HTC are gaining market shares at 24 per cent and 20 per cent respectively. They are accompanied by Blackberry having less than 17 per cent of the market. So the major threats of the Chinese mobile manufacturer are Apple, Samsung and HTC which are settled in the market for quite some time with their wide range of Smartphone.
Some of the major challenges for the Chinese mobile manufacturer will be to persuade the population in the market to be interested in their product and to understand the benefits of the product according to its price (Stávková, 2008). Making the people in the UK Smartphone market realize the positive price-to-performance ratio is another challenge the Chinese mobile manufacturer has to face. First they have to position their brand as reliable, cheap and authentic.
LO 4 Be able to measure customer satisfaction
Q4.1 Evaluate how you would assess customers response using the following two techniques;
1) A face-to-face questionnaire and
2) An online questionnaire.
Questionnaire is a method of market research which consists of several questions of different types to a group of people or general population. The purpose of the questions in this method is to collect as much data about the market as possible from the customers. The questionnaires are generally cheaper, simpler and easier than some other types of surveys. This can be done by using several techniques, such as face-to-face and online questionnaires.
The face-to-face questionnaire allows the interviewer to be physically present to ask the questions to the interviewee directly. Face-to-face questionnaires are conducted when they are absolutely required (Chen, 1996). There are several advantages of the face-to-face questionnaires, but there are a lot of costs associated with the process as well. Face-to-face questionnaire follows a standardized questions and answers pattern.
Advantages: The face-to-face questionnaire allows the interviewer to ask several complex questions and to help the interviewee to understand the question. The interviewer can perceive the facial expression, body language and gestures of the interviewee to decide which questions to ask and how to ask those questions. The face-to-face questionnaire allows the collection of some data that can’t be collected from any other source.
Disadvantages: The cost of conducting such questionnaires is very high. The process of face-to-face questionnaires also takes a lot of time and a limited number of people can be interviewed in a particular amount of time (Stávková, 2008). The required number of interviewers is also high. The interviewee in this type of questionnaires can also get influenced, biased or affected by the interviewer to compromise the quality of the data.
This type of questionnaire is conducted on the digital media. The usage of social networking sites, search engines, websites and blogs is done for the successful operation of the questionnaire.
Advantages: The time taken by the process is less in comparison to the total number of people going through the questionnaire. There is no requirement of having a large number of interviewers or a particular venue for the process to undergo. The people don’t get affected by the process and tend to answer honestly by being assured of anonymity.
Disadvantages: The direct interaction with the interviewee is not possible in this type of questionnaire. The quality of the questions can’t be enhanced depending on the response to previous questions.
Q4.2 For an organisation of your choice, design and complete a customer satisfaction survey. Your questionnaire should contain a minimum of 10 appropriate questions.
Customer satisfaction surveys are conducted by several organisations to get an idea about what the customers exactly think about the products of the organisations which they are using. The final stage of the buyer behaviour is the process of the customers weighing the product’s cost and the decision to buy it with the benefits and the ease of use it provides (Bettman, 1991). The questions in the customer satisfaction survey are designed in a way to ensure the collection of both qualitative and quantitative data. A questionnaire for a mobile phone manufacturer like Nokia is provided in the next segment containing different types of questions.
- What is the model of the mobile phone you own?
- Which of the features of the mobile you like the most?
- Build quality
- Battery backup
3. When did you last receive any after sale service from our organisation?
4. Which of the following services have you received?
- Accessories change
- Firmware update
- Resetting the mobile to an earlier version
- Change of cabinet of the mobile
- Are you completely satisfied with the solution provided by the service centre? Yes/No
- Is the problem with your mobile completely solved? Yes/No
- How satisfied are you with the overall service provided to you?
- Very satisfied
- Very unsatisfied
- Would you recommend any of your friends and colleagues to receive our service? Yes/ No
- What can we improve in our service?
- What did you like the most about the service you received?
Q4.3 For the organisation you used in Q4.2 above, review the success of the completed customer satisfaction survey.
The customer satisfaction surveys are conducted by the organisations to determine the mind-set of the customers regarding them and their products or services. The questionnaire associated with the customer satisfaction survey is designed in such a way that the questions cover all the aspects of the usage of the product or service (Chen, 1996). The questions are also designed to collect both qualitative and quantitative data. The number of respondents for the customer satisfaction survey designed in the last segment is very high. This allows a huge amount of data to be collected. This information is related to all the aspects and features of the mobiles. The customer satisfaction survey was proved to be a success as the number of people attending the survey provided the answer honestly. The objectives of the questions were met as there are a lot of suggestions for several areas of improvement in the mobiles and the services provided by the mobile company. The number of customers who received any type of service from the mobile company are also determined and documented (Stávková, 2008). The demand for a particular model of mobile from the company is also determined by looking at the number of people owning that model. Some of the common problems in some of the mobiles of the corresponding company are also identified according to the problems faced by the customers included in the survey. The training and development processes for the employees in the service centres of the mobile company are started according to the feedback from the customers. The feedback about several models of mobiles allows the company to identify, anticipate and satisfy the needs of the customers further in the future.
Andreassen, T. W., & Lindestad, B. 1998. Customer loyalty and complex services: the impact of corporate image on quality, customer satisfaction and loyalty for customers with varying degrees of service expertise. International Journal of Service Industry Management, 9(1), 7-23.
Bettman, J. R., Johnson, E. J., & Payne, J. W. 1991. Consumer decision making. Handbook of consumer behavior, 44(2), 50-84.
Chen, M. J. 1996. Competitor analysis and interfirm rivalry: Toward a theoretical integration. Academy of management review, 21(1), 100-134.
Deshpande, R., & Zaltman, G. 1982. Factors affecting the use of market research information: a path analysis. Journal of marketing research, 14-31.
Häubl, G., & Trifts, V. 2000. Consumer decision making in online shopping environments: The effects of interactive decision aids. Marketing science, 19(1), 4-21.
Howard, J. A., & Sheth, J. N. 1969. The theory of buyer behavior (Vol. 14). New York: Wiley.
Malhotra, N. K., Birks, D. F., Palmer, A., & Koenig-Lewis, N. 2003. Market research: an applied approach. Journal of marketing management, 27, 1208-1213.
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