OCR Cambridge TEC - Level 3 Certificate/Diploma Business LO2 - Be able to use marketing research and...

OCR Cambridge TEC - Level 3 Certificate/Diploma Business

LO2 - Be able to use marketing research and marketing planning

Unit 03 – Introduction To Marketing

Y/502/5411

Scenario Criteria Tasks Assessment1 2 3 4 5 6 7 8 9 10 11

Tutors could introduce learners to marketing planning by starting with an explanation of strategic and operational objectives with examples from private and public sector, as well as small and large organisations. Group discussion could then focus on academic theory and how marketing objectives fit into this. Plus, how the marketing planning process and models such as Ansoff Growth strategies, PESTLE and SWOT analysis are used. Websites such as “thetimes100” offer a range of case studies that can be used for group discussions and presentations.

Having considered marketing planning, tutors can lead naturally onto the question of where organisations obtain the information necessary for the planning process, which in turn leads into the topic of marketing research.

Whilst there could be some tutor-led input, ample opportunity could be given for learners to investigate different aspects of primary and secondary research and consider a range of research methods using internal and external sources of qualitative and quantitative information. YouTube videos of focus groups and sources of secondary research such as Mintel may be useful. Tutors could then focus on the way that research information is used in the marketing planning process, for example in the development of a PESTLE analysis, a new product development, or a change in packaging or distribution channel.

Unit 03 - LO2 - Scenario


Learning Outcome (LO) The learner will:

Pass The assessment criteria are the pass requirements for this unit. The learner can:

Merit For merit the evidence must show that, in addition to the pass criteria, the learner is able to:

Distinction For distinction the evidence must show that, in addition to the pass and merit criteria, the learner is able to:

1 Know the role of marketing in organisations

P1 Describe how marketing techniques are used in the marketing of products in two organisations

M1 - Analyse marketing techniques used in the marketing of products in two organisations

D1 - Recommend improvements to the marketing techniques in one organisation

P2 Describe the main employability and personal and communication skills required when applying for a specific job role

2 Be able to use marketing research and marketing planning

P3 Describe how a selected organisation uses marketing research to contribute to the development of its marketing plans

P4 Use marketing research for marketing planning

3 Understand how and why customer groups are targeted

P5 Explain how and why groups of customers are targeted for selected products

4 Be able to develop a coherent marketing mix.

P6 Develop a coherent marketing mix for a new product or service

M2 - Evaluate how the developed marketing mix would need to be modified for a new contrasting target group of customers

D2 - Evaluate how the developed marketing mix would need to be modified for a new contrasting target group of customers

LO2 - Assessment Criteria


Assessment Criteria P3 - Scenario and task The company wants more information about how market research is carried out by

UK businesss. You are asked to describe how one organisation uses both primary and secondary marketing research in the development of its marketing plans.

Guidance: Learners should describe how their chosen organisation uses marketing research to provide information for their marketing planning. The description should cover the type of research undertaken (primary, secondary, quantitative and qualitative) as well as the methods used and how the information is used in the planning process.

Assessment Criteria P4 - Scenario and task The company is keen to ensure that their product launch into the UK market is

successful. Using a range of research information you are asked to make recommendations both in terms of marketing planning and as to what further research should be conducted.

Guidance: Learners should use the research provided as a basis for marketing planning. This information could be provided by tutors. Learners could use the information as part of PESTLE or SWOT analyses, to inform marketing mix decisions or to identify new target markets.

Assessment Criteria – P3 and P4


Consumer market research is a form of applied sociology that concentrates on understanding the behaviours, whims and preferences, of consumers in a market-based economy, and aims to understand the effects and comparative success of marketing campaigns. ,

In order to achieve their marketing objectives, businesss use marketing strategies and tactics. It is therefore possible to place a company’s corporate objectives, marketing objectives, marketing strategies and marketing tactics into a hierarchy.

To this end there are 2 kinds of objectives a company will assume, Strategic, small aims to push the company like growth, survival, to profit etc., not specific, and Operational, SMART targets, precise purposes, setting goals towards single aim.

P3.1 – Market Research and Planning – Objectives - Strategic


Consumer market research is a form of applied sociology that concentrates on understanding the behaviours, whims and preferences, of consumers in a market-based economy, and aims to understand the effects and comparative success of marketing campaigns. ,

In order to achieve their marketing objectives, business use marketing strategies and tactics. It is therefore possible to place a company’s corporate objectives, marketing objectives, marketing strategies and marketing tactics into a hierarchy.

To this end there are 2 kinds of objectives a company will assume, Strategic, small aims to push the company like growth, survival, to profit etc., not specific, and Operational, SMART targets, precise purposes, setting goals towards single aim.



All businesses have strategic objectives they want to achieve. These are the long-term visions or goals of a business.

Strategic Objectives

of the Business

Survival

Profit Maximisation

Break-Even

Expansion of Market

Share

Service Provisions

Relationships with other Businesses

Growth



Strategic Objectives are set to provide a focus for the organisation. These objectives will always link to the main purpose of the organisation.

Privately owned businesses objective is to make a profit, and most will also want to increase this each year. Some will aim for profit maximisation, which means making as much profit as possible.

If trading is difficult, for some reason, then making good profits may be unrealistic. In this situation, the business may aim just to survive, until times improve.

One method of surviving is to aim to break-even over a certain period. This means making enough money to cover the total costs involved in producing and selling the goods or services and running the business. There is no profit, but there is no money lost, either.

The business may aim for growth, so that it sells more goods or services. This may mean expanding by opening other branches or buying out a competitor.

Another objective may be service provision. This may mean offering a new service or improving current services to attract more customers, such as businesses which extend their websites to allow customers to order and pay for goods on line and track deliveries.

Many businesses have a constant objective of expanding their market share. This normally means taking business away from their competitors.

Some business objective is to improve or develop their relationships with other businesses. This may involve joint initiatives to offer goods or services to more people.

Although a business may have more than one objective, it is sensible not to have too many. Most focus on two or three which are appropriate to the main business purpose.



Private Sector Public Sector Voluntary Sector

Business examples

Manufacturers, retailers, banks,builders, solicitors

Governmentdepartments, localcouncils, NHS hospitals, state schools

Community groups and charities such as Oxfam and Cancer Research UK

Purpose • To provide goods and/or services• To make a profit

• To provide a quality service to the community

• To provide a free service for the needy

• To promote a particular cause

Strategic Objectives

• Maximise profits by increasing sales and keeping costs low

• Increase market share• Expand or develop the business

• Improve service provision• Operate within budget (i.e.

break-even)• Increase surplus• Increase services offered

Objectives• Increase sales• Increase number of customers• Reduce costs

• Meet customer targets (e.g. patient waiting times)

• Keep costs low

• Increase revenue from donations

• Reduce costs

Aims and objectives in different sectors - Strategic objectives are designed to help an organisation to achieve its key purpose and provide a focus for staff. They vary between organisations in different sectors because these businesses have different purposes.Private sector businesses provide goods and/or services and must make a profit to survive. They can only break-even (or make a loss) for a very short time or the business would have to close.Public sector businesses are owned by the state and provide many essential services free of charge and others at or below cost price.Voluntary sector organisations raise money which is used to support a particular cause. They do not aim to make a profit but to generate a surplus, after the costs of the business have been deducted.



Profit is basically what is left after all expenses have been deducted It is the difference between price and all the costs of bringing to market the enterprise in

question◦ Net profit (before tax)◦ Gross profit ◦ Net profit after tax◦ Operating profit

A key difficulty in measuring profit is in defining costs. Business’s have many different components in their Strategic Objectives. This usually

incorporates some form of profitability but usually with additional areas for the business to strive in.◦ For example to invest profit to ensure customers are delighted

To Survive - Goes without saying all companies wish to survive, so this would probably be an unwritten Strategy of any business objective.

To achieve technical excellence - The aim of any business should reflect the business itself. Achieving technical excellence could be one such aim of a technology-based organisation

Increase and Enhance the Quality and Variety of Service they Offer - Improving the quality of the goods and service the company offer should be the focus of all businesses, but whether or not it is a driving force is another matter.

To do so involves investing in research and development – asking what customers want and searching for new suppliers, production and delivery methods.



Lower Costs or Improve Service Delivery – This can be done through business methods such as:◦ Disintermediation – removing the middle man in the business transaction.◦ Going Online - No requirement for expensive ‘high street’ premises◦ Reduced staffing due to the computer systems used◦ Cheaper marketing (lower advertising costs on the internet)

Growth - Growth or expansion is not always easy and moving into new markets or increasing production requires immense planning and investment. Growth also needs to be targeted:◦ Larger market – possible globally◦ Ability to target a number of socio-economic groups (+ by gender)◦ Cheaper advertising – more frequent advertising (pop-up menus and banners)◦ Use of search engines (Portals)◦ Web page can be easily added to accommodate new markets and languages◦ Lower costs (no building costs, legal expenses for planning permission)

Increase Market share is the ratio, normally a percentage, of sales when compared to total sales of a particular good or service.◦ For example in the European small car market, Ford Fiesta holds 22%



Operational marketing objectives are the intended goals of a company’s marketing campaigns. Marketing objectives are often listed as SMART goals, targets to achieve the strategic objectives. This acronym stands for specific, measurable, achievable, realistic and time-sensitive. An example of a SMART marketing goal is to increase cereal sales by 10% in six months through 10 week-long product awareness campaigns held in five target cities. Business objectives must align with corporate objectives, additionally they must be synchronised with the goals of other departments, including accounting, procurement and customer service.

Business objectives are short-term goals will contribute to the strategic aims of the organisation. Strategic aims are tend to be given in general terms. Objectives are best described in SMART terms. Specific - ‘to raise profits’Measurable - ‘by 20%’Achievable- ‘by improving efficiency’Resources - ‘based upon last years figures, resources and market trends’Time-bound - ‘in this years trading’

P3.1 – Market Research and Planning – Objectives - Operational


A problem with some objectives is that they are not very clear or specific. You may decide to join a gym but then only go when you feel like it; you may decide to save for a holiday without setting a specific amount. In both cases you may fail to fulfil your aims. This type of problem can be overcome by setting SMART objectives which are:

Specific - There is a clear definition, often including a number, for example saving £20 a week. Measurable - This means achievement can be checked. Banking your savings means your bank

statement will record and measure your achievement. Achievable - This means you can attain your target if you stretch yourself a little – so saving £20 a

week may be achievable without having to make too many sacrifices. Resources - This means the target is sensible due to the resources at hand so that you stand a chance

of achieving it. You could not save £20 a week if you did not have the tools for a job that paid at least that amount.

Time-bound - Every objective should have a date for achievement or review. Therefore, you could set a time limit to review your progress after three months.

It should be fairly obvious from this list that it is very difficult to wriggle out of an objective that is SMART. You either achieve it or you don’t!

P3.1 – Task 01 – Discuss the nature of Strategic and Operational Objectives with examples of how marketing can benefit achieving each.P3.1 – Task 02 - Describe the Strategic and Operational objectives of a selected organisation and explain how it uses marketing research to contribute to the development of these objectives.

P3.1 – Market Research and Planning – Objectives - Operational

Strategic Objectives (Aims) Operational Objectives


The Ansoff Growth matrix is a recognised marketing planning tool that helps a business determine its product and market growth strategy. Ansoff outlined some important strategies for business growth. He identified four key approaches to growing a business.

◦ Market penetration: Increasing market share for a business's products in its existing markets. Several approaches help to achieve this, including product improvement; updating and building/improving existing products.

◦ New product development: developing new products for existing markets.◦ Market development: finding and developing new markets for current product lines. This is most suitable when

existing products require only minor modifications to be suitable for new, overseas markets. It also helps if the product life cycle is similar in the different markets that the business serves. This will not always be the case.

◦ Diversification: developing new product markets outside the existing business. A business will pursue this strategy where new markets are highly attractive. To do so, it may switch resources from some of its existing markets that it believes to be in permanent decline.

Ansoff’s product/market growth matrix suggests that a business’ attempts to grow depend on whether it markets new or existing products in new or existing markets. The output from the Ansoff product/market matrix is a series of suggested growth strategies which set the direction for the business strategy. See next slide for more details.

P3.2 – Task 03 – Discuss the Ansoff Growth matrix with examples of how marketing can benefit achieving these stages.P3.2 – Task 04 – Apply the Ansoff Growth matrix to a selected organisation and explain how it uses marketing research to contribute to the development of these stages.

P3.2 – Market Research and Planning - Strategies


Market penetration - Market penetration is the name given to a growth strategy where the business focuses on selling existing products into existing markets. Market penetration seeks to achieve four main objectives:◦ Maintain or increase the market share of current products – this can be achieved by a combination of competitive pricing strategies, advertising,

sales promotion and perhaps more resources dedicated to personal selling◦ Secure dominance of growth markets◦ Restructure a mature market by driving out competitors; this would require a much more aggressive promotional campaign, supported by a

pricing strategy designed to make the market unattractive for competitors◦ Increase usage by existing customers – for example by introducing loyalty schemes

A market penetration marketing strategy is very much about “business as usual”. The business is focusing on markets and products it knows well. It is likely to have good information on competitors and on customer needs. It is unlikely, therefore, that this strategy will require much investment in new market research.

Market development - Market development is the name given to a growth strategy where the business seeks to sell its existing products into new markets. There are many possible ways of approaching this strategy, including:◦ New geographical markets; for example exporting the product to a new country◦ New product dimensions or packaging: for example◦ New distribution channels (e.g. moving from selling via retail to selling using e-commerce and mail order)◦ Different pricing policies to attract different customers or create new market segments

Market development is a more risky strategy than market penetration because of the targeting of new markets. Product development - Product development is the name given to a growth strategy where a business aims to introduce new products into existing

markets. This strategy may require the development of new competencies and requires the business to develop modified products which can appeal to existing markets. A strategy of product development is particularly suitable for a business where the product needs to be differentiated in order to remain competitive. A successful product development strategy places the marketing emphasis on:◦ Research & development and innovation◦ Detailed insights into customer needs (and how they change)◦ Being first to market

Diversification - Diversification is the name given to the growth strategy where a business markets new products in new markets. This is an inherently more risk strategy because the business is moving into markets in which it has little or no experience. For a business to adopt a diversification strategy, therefore, it must have a clear idea about what it expects to gain from the strategy and an honest assessment of the risks. However, for the right balance between risk and reward, a marketing strategy of diversification can be highly rewarding.

P3.2 – Market Research and Planning - Strategies


Once the aims and objectives of a business are decided, the company then sets plans in motion that determine these. These are either publically available of given to directors, share holders, investors etc.

Marketing planning process - Several stages have to be completed in order to arrive at a strategic marketing plan. The extent to which each part of the above process needs to be carried out depends on the size and complexity of the business.

In a small business, where senior management has a strong knowledge and detailed understanding of the overall business, it may not be necessary to formalise the marketing planning process.

By contrast, in a highly diversified business, top level management will not have knowledge and expertise that matches subordinate management. In this situation, it makes sense to put formal marketing planning procedures in place throughout the organisation.

P3.3 – Market Research and Planning - Processes


P3.3 – Market Research and Planning - ProcessesComponent of the plan Description

Mission statement A meaningful statement of the purpose and direction of the business

Corporate objectives The overall business objectives that shape the marketing plan

Marketing audit The way the information for marketing planning is organised. Assesses the situation of marketing in the business – the products, resources, distribution methods, market shares, competitors etc

Market analysis The markets the business is in (and targeting) – size , structure, growth etc

SWOT analysis An assessment of the company’s current position, showing the strengths & weaknesses (internal factors) and opportunities and threats (external factors)

Marketing objectives and strategies

What the marketing function wants to achieve (consistent with corporate objectives) and how it intends to do it (e.g. Ansoff, Porter)

Marketing budget Usually a detailed budget for the next year and an outline budget for the next 2-3 years

Action plan The detailed implementation planP3.3 – Task 04 – Discuss the importance of having a marketing plan and explain how this can benefit the planning for your chosen business..


Mission - A strategic marketing plan starts with a clearly defined business mission, often put into a mission statement, a statement of business intent. “A mission describes the organisation’s basic function in society, in terms of the products and services it produces for its customers”. Mintzberg. A clear business mission should have each of the following elements:

Purpose - Why does the business exist? Is it to create wealth for shareholders? Does it exist to satisfy the needs of all stakeholders e.g. employees and society.

A Strategy and Strategic Scope - A mission statement provides the commercial logic for the business and so defines two things:◦ The products or services it offers◦ The competences and method of competing

through which it tries to succeed A business’ strategic scope defines the

boundaries of its operations. These are set by management. For example, these boundaries may be set in terms of geography, market, business method, product etc. The decisions management make about strategic scope define the nature of the business.

P3.4 – Market Research and Planning – Processes - Mission


Policies and Standards of Behaviour - A mission needs to be translated into everyday actions, e.g. if the business mission includes delivering “outstanding customer service”, then policies and standards should be created and monitored that test this.

These might include monitoring the speed with which telephone calls are answered in the call centre, the number of complaints received from customers, or the extent of positive customer feedback via questionnaires.

Values and Culture - The values of a business are the basic, often un-stated, beliefs of the people who work in the business. These would include:◦ Business principles (e.g. social policy, commitments to customers) ◦ Loyalty and commitment (e.g. are employees inspired to sacrifice their personal goals for

the good of the business as a whole? And does the business demonstrate a high level of commitment and loyalty to its staff?)

◦ Guidance on expected behaviour – a strong sense of mission helps create a work environment where there is a common purpose

What role does the mission statement play in marketing planning - In practice, a strong mission statement can help in three main ways: ◦ It provides an outline of how the marketing plan should seek to fulfil the mission◦ It provides a means of evaluating and screening the marketing plan; are marketing

decisions consistent with the mission? ◦ It provides an incentive to implement the marketing plan

P3.4 – Market Research and Planning – Processes - Mission


External audit and internal audit – With the statement in pace and a marketing theory prepared – the company will then audit what they have and what they need to carry out a marketing plan.

External Audit – This is to define what the company on the outside is capable of doing with what is around, e.g. supporting a local football team needs to have a local team. Leaflet distribution needs to have a local area defined, competition, transport links, an audit of the local community demographics etc.

Internal Audit – What the company has to get the marketing done, staff, premises, facilities, ICT, contacts, skill set, marketing team, transport capability, distribution network etc.

Every company will be different, some will use a distribution chain like leaflet droppers, some will use internal marketing more than external like Tesco’s, some will have franchise companies that produce the materials.

P3.4 – Task 06 – Discuss the importance of Mission Statements and Audits and explain how this can benefit the marketing planning for your chosen business with examples.

P3.4 – Market Research and Planning – Processes - Audit

Mission Plan and Statement Internal and External Audit


Setting objectives – At this point a company will need to set SMART objectives for the marketing strategy. Companies have SMART targets for a lot of things, an overall objective for the company or small like a days target. For marketing this will need to encompass a success goal, a time restraint for the current marketing and some form of criteria that can be measured to gauge the success.

P3.5 – Task 05 – Explain and construct a SMART target for your selected business marketing plan to promote one new product and explain how each stage can be measured and justified in terms of how this can benefit the chosen business. Determining strategy - Businesses that succeed do so by creating and keeping customers. They do

this by providing better value for the customer than the competition. Marketing management constantly has to assess which customers they are trying to reach and how

they can design products and services with a competitive advantage. The main problem with this process is that the “environment” in which businesses operate

constantly changes. Therefor a business must adapt to reflect changes in the environment and make decisions about how to change the marketing mix in order to succeed. This process of adapting and decision-making is known as determining strategy.

From the Ansoff Matrix the company then decides the ultimate goal of the strategy:◦ Market penetration, New product development, Market development or Diversification.

They will decide how this fits into the longer term aim of the company, how it will benefit other areas, how it can be joined to different SMART targets and corporate aims. Linking this tot the Mission statement, corporate policy, ethical principles, social code and financial restraints. All this needs be decided first in order for a company to progress.

P3.5 – Market Research and Planning – Processes – Setting objectives


Implementing marketing techniques – Then it is time to choose the marketing technique that will be used, the place, the style, the format, the length. Using a product life cycle they will market their new range of goods, choosing what will work best to gain the most attention, setting budgets aside and producing materials.

After all the planning, this is the important part, get this wrong and it can be financially and reputation wise, bad for the company. Look at the Ford Edsel in the 1950’s, Nintendo Virtual Boy, the publicity for Waterworld and a host of others. All viable ideas with terrible campaigns.

Monitoring and evaluation – And when it is out there, you need to evaluate how it is working, is there an increase in sales, is there a buzz of activity, have you got feedback from the customers on the product and the campaign. In Supermarkets this is easy to determine through effective management of products on the shelves and sales, success or failure can be gauged daily, hourly and adapted to increase potential but for other products like a film release, this is a one off chance, with monitoring and evaluation you can determine the success of the product and learn from it but little time to adapt it.

P3.6 – Task 07 – Discuss the importance of Determining the right Strategy, Implementing the right Market Techniques and effective Monitoring and Evaluation of a marketing campaign and explain how this can benefit the marketing planning for your chosen business with examples.

P3.6 – Market Research and Planning – Processes - Monitoring


Definition and use of marketing research – Why do market research, why is there a need to know what the customer wants or to prepare for change. There are a lot of definitions on what Market research is and its importance, what is achieved, what companies do with the results, how they manage the change that comes from implementing a marketing plan based on market research.

P4.1 – Task 08 - Using either of the two Case Studies, Tesco’s or Halfords, define the function and use of Market research. For Tesco’s answer the following questions:

1. Analyse why Tesco has chosen to focus on small, local stores in Japan and the USA rather than on larger stores.

2. Analyse internal factors that might have influenced Tesco’s marketing objectives.

3. Examine factors that might cause Tesco to change its marketing objectives suddenly, such as its decision to enter the US market.

For Halfords answer the following questions:

1. Analyse why it might not necessarily be beneficial for Halfords to have set marketing objectives that were all achieved with relative ease.

2. Identify two possible corporate objectives that might have led to Halfords’ marketing objectives. Explain your reasoning.

P4.1 – Market Research and Planning – Definition and Use


Information on customers - Collecting all of this market research would be a massive waste of resources unless it is used. How it is used very much depends on why the research was carried out in the first place and what data was deemed to be necessary◦ Understanding customer preferences so that businesses can better meet these◦ Understanding customers/potential customers/market/populations lifestyles and

aspirations Lifestyles can be classified using a couple of tools – ACORN and MOSAIC

ACORN (acronym for A Classification Of Residential Neighbourhoods) is a geo-demographic information system categorising all United Kingdom postcodes into various types based upon census data and other information such as lifestyle surveys - sold to businesses, health and local authorities typically for marketing and planning purposes.

Using this information will allow the company to target the specific customer and therefor increasing profit and sales potential. You would not open a BMW store in a poor area or a Poundshop in an expensive area. Similarly you would advertise food in the evenings (dinner time), home and personal insurance at 4-5pm, alcohol on Friday and Saturday and holiday destination from April onwards.



Competitors’ actions and performance - If the market is highly competitive, such as dairy farming, it is difficult for an individual farmer to achieve a high market share. For this reason, many farmers are now starting to target niche markets, such as sales through farmers’ markets, in which there is less direct competition.

Scrutinising competitor’s activities - Questionnaires and information gathered from quantitative and qualitative data can be used to find out what a company is doing wrong such as shipping goods, price, location and also what a competitor is doing well. This could benefit a company such as Amazon when they are selling their Kindle reader know that their customers prefer buying e-books from Waterstones rather than from them because they have a more extensive range and they are 10 pence cheaper. Amazon could use this information to make their e-books cheaper and improve their range also so they can draw more customers back to them to buy e-books.

Everything costs money and knowing what your rivals are doing, when they are doing it, and what they are doing successfully will benefit your own campaign.



Contribution to decision making process - DMU’s or decision making units are a group of people who analyse market research and are involved in the decision making process. ◦ The members of a household are a DMU with regard to which television show to watch◦ Women are most often the DMU for cosmetics and men for shaving cream

Marketers need to know who participates in a decision and the relative influence of each in order to create advertising that influences that decision.

Organisations use this information to target their production / advertising / etc... towards the necessary target groups using Market Segmentation. This can take place based on size, region, value, public/private/voluntary sector, product and industry

This can be useful for companies who need to improve their business. For example like Gordon Ramsay’s Kitchen Nightmares where Gordon Ramsay goes into a restaurant that is failing both financially and in their sale of food and teaches the staff and the managers how to improve their food so that they can improve their profit and increase the amount of customers coming to their store. This can help a company improve by increasing their sales and profit by just paying one outsider to come in and improve their business.

P4.2 – Task 09 – Discuss how Market research can help define the audience needs, intentions and benefit the business in target marketing.


Information on customers

Competitors’ actions and performance

Contribution to decision making

process


Sourced location of information can be split into two distinct places; internal and external, both with their merits and issues. Companies will use both locations for bets effect and few companies will work independently of both. Supermarkets have suppliers as well as customers, factories are still the middle men for raw materials and customers.

Internal (e.g. financial reports, market analysis) , ifomartion that belongs to the company made by the company including:◦ Customer Databases – this is information related to who is registered and what customers are regular or active. This can

be gained from customers registering, things they have bought, tracking cookies, accounts, vested interests and contributors.

◦ Reporting Systems – this is information related to business and staff calls and logs. This can be gained from network and system logs, network accounts traffic, customer support calls, website activity, purchases etc.

◦ Stock Control - this is information related to business processes. This can be gained from internal inventories, the processes of shelving and stock databases, register of sales and returns.

◦ Financial Information: this is information related to the performance and profit and loss of the company including information on how much items cost, how much staff are paid, the costs of rates and the taxes that are paid as a business.

◦ Personnel Information: This is information held by the company on their employees. This information must be freely available to the employee any time that they request it.

◦ Marketing Information: this is used by the marketing team to identify what products or services offered are most successful. They collect information from different departments such as sales to promote certain products or services based on current success rates.

◦ Purchasing Information: this is collected by the purchasing department who are involved with buying all of the products needed to run your business.

◦ Sales Information: this needs to be monitored based on the product or services offered by your company. This information needs to be passed to ensure that the cost of your good or service is less than the sale price.

◦ Manufacturing information: This is information about the cost of manufacturing goods within the company and will normally include the running cost of all machinery, the wages paid to production staff and the cost of raw materials used up in the manufacturing process.

P4.3 – Market Research and Planning – Types - Internal


External: Examples of external information sources are: Government, trade groupings, commercially provided information, database and research. If a company uses external sources of information then they must be sure of the reliability of the data sources. Here are some examples of how the company could use information supplies by external sources:◦ Government: This comes from a reliable source as this is the governing body that they business operates

within. Companies need to use important legal information from the Government to help run the business successfully and legally. For example, if the Government offered businesses grants for opening manufacturing plants in areas of high unemployment a company might use this information to their advantage to set up a new plant at a lower cost than in another area.

◦ Trade Groupings: This is a group of businesses that operate within the same sector and not within the same location. For example tech companies would be part of the Technical Trade Association and Farmers part of the Farming Association within a country or region. As a business being a member of a trade grouping enables you to access information that helps you run your business successfully. For example, solicitors are part of the legal trade and will have memberships that give them access to the latest laws that the must use to support their clients in the best possible way.

◦ Commercially Provided: Companies can use this information to help them make the correct business decisions. These decisions are made based on information made available to them from other companies. For example, a hotel group might use the information about the number of flights to and from a number of airports along with the information on the number of hotels beside each airport to make a decision on where to open their newest hotel.

◦ Databases & Research: Companies can research information that might help them increase the sales and level of interest in their business. The key thing to researching information that helps run your business to ensure it is accurate and reliable. Some companies will pay to access commercially available databases that offer a range of information directly based on their business sector.

P4.3 – Market Research and Planning – Types - External


Sourced information can be split into two distinct categories; primary and secondary, both with their merits and issues.

Secondary research (desk research) involves the summary or collation of existing research rather than primary research, where data is collected from, for example, research subjects or experiments. Basically using someone else’s primary research to aid your own research problem. The benefits include:

◦ Companies hired know what they are doing and where to look for information◦ Companies hired can analyse information◦ It is easier to get someone else to do the work◦ Does not require additional staffing◦ Disadvantages include:

Can be expensive Relies on the honesty of the external body Can be too specific and non adaptable.

Forms of Secondary Research include:◦ Desk bound research – This could involve using internal databases, Sims, EPOS etc. or external means such as

phone conversations. Useful because it includes company files and work, which should be the most accurate available.

◦ Internet research – Almost unlimited but not verified. There are ways of improving standards and verification to increase reliability. Work can be sources, quotes to a degree and can be gained from copyright free sources.

◦ Research organisations such as Mintel – Useful, accurate, up-to-date, verified already and in depth. Downsides is that they may need subscriptions.

◦ Office for National Statistics – Verified, reasonably up to date, broken down, useful for qualitative work, copyright free and wide in the amount of information.

P4.3 – Market Research and Planning – Types - Primary


Sourced information can be split into two distinct categories; primary and secondary, both with their merits and issues. Primary research (field research) involves the collection of data that does not already exist. This can be achieved through

numerous forms, including questionnaires and interviews. This is research the company carries out itself, with its own staff, for its own purpose. There are obvious benefits to this kind of research:

◦ Can be tailored to the companies needs

◦ Company can control the flow of information

◦ Can be adapted on the spot to gauge additional opinion There are many pitfalls for this type of research:

◦ Could be very expensive because many people need to be contacted.

◦ Take a long time and be out of date when the research is complete.

◦ People may not reply if emails or letters used. Forms this can take include:

◦ Face to face questionnaires – more personal than online questionnaires, can gauge customer reaction, can follow up with qualitative questions. Downside is the choice of interviewee can be biased and customers are not rewarded.

◦ Postal or e-mail surveys – can be done in their own time, can be part of a website where customers stand a chance of being rewarded. Posted ones are expensive, need to come with return letters, email ones are free and can be distributed on mass.

◦ Online surveys – free, easy to use, take less time, can lead to rewards, easy to set up, can be automatically calculated, can use branding or visual sales techniques during the process.

◦ Focus groups – very precise, usually chosen among many, consensus opinion, usually have an opinion, would not choose to answer unless willing to give an opinion.

◦ Panels – harder to impress, not an average opinion, leads to conflict, opinion based rather than figure based.

P4.3 – Market Research and Planning – Types - Primary


Sourced information can be split into two distinct types of response; qualitative and quantitative, both with their merits and issues.

Qualitative methods are ways of collecting data which are concerned with describing purpose and meaning, reasons for things, rather than with drawing statistical responses. What qualitative methods (e.g. case studies and interviews) lose on reliability they gain in terms of validity. They provide a more in depth description, opinion based responses that can be used to judge why rather than how many. Examples include Why, How, For what reason, In your opinion etc.

It is generally much less structured, and is often described as being more "exploratory" or "directional" because it seeks to reveal new attitudes or perspectives that may help to reveal something new about the respondent's motivations or pain-points that may help to improve a current product, or even develop a new product category entirely.

Qualitative Benefits

◦ Qualitative could be described as more freeform, often with broad questions such as "what do you like about that?" or "what would your ideal product look like?"

◦ Often questions asked of respondents in qualitative research don't include specific answers; instead they simply prompt the respondent to answer the questions in their own words. Allowing customers to answer in their own words, without constraint or suggestions, does tend to uncover factors that may be working underneath the surface. This can lead to an "a-ha" moment in which there is an insight into their customer's needs and motivations.

Qualitative Disadvantages

◦ Qualitative market research does not allow for statistical analysis.

◦ The cost per opinion in qualitative market research is significantly higher than it is in quantitative market research, typically because the economics of scale is not helped by the typically lower numbers of respondents used in qualitative research.

◦ Qualitative market research is sometimes followed up with quantitative market research in order to understand what percentage of the target customer group feels the different ways that were discovered in the qualitative phase

P4.3 – Market Research and Planning – Types – Qualitative


Quantitative methods allow for statistically reliable information obtained from numerical measurement to be backed up by and enriched by information about the research participants' explanations. They are results that can be calculated, formulated, put into Spread sheets and drawn up, used as information that can be queried, sorted and defined against previous and future information. Examples include Yes/No, out of ten, > or <. Even single answer responses can be added up if there is a restriction on the possible responses.

Is a rigid research tool that typically asks every respondent an identical set of questions, generally allowing the respondent only to select from a group of pre-defined answers. In general quantitative market research include far more respondents, and therefore tends to cost more money than do qualitative studies.

Examples of quantitative market research include: phone interviews, web or mail questionnaire Quantitative Benefits It has a lower cost, is faster, and has an opportunity for more in depth analysis. It is more practical and creates greater confidentiality and

accuracy. The research creates a better acceptance of results and data from entire small populations can be obtained. There should be no random sample error and it does not require a complex theory to select a representative sample or in deciphering results. Data can be reported on every segment of the population and when there are differences it is easer to detect.

Quantitative market research can help to identify statistically different expectations or feature preferences, customer satisfaction levels or other differences that may help to better understand whether two groups are essentially identical in certain facets, or if there are differences that could be capitalized upon. ◦ wide variety of types of analysis that can be done on quantitative research results◦ generally include far more respondents and are not typically done face to face.

Quantitative Disadvantages◦ Difficult to estimate sample size so that bias is not reflected in the statistical results. The size of the population will directly influence the

result, so the bigger the sample size the lower the instance of random error. Research can be resource intensive and can take several weeks to many months to design, implement, and analyse. It also requires skill in sampling design issues and statistical techniques.

◦ Market researchers have a good understanding of what types of answers customers would want to select, because the respondent is typically asked to select the best answer from a number of pre-defined options.

P4.3 - Task 10 - Describe the features of Information Sources and outline the advantages and disadvantages of each.P4.3 – Task 11 – For your chosen company describe the Sources of information used with evidenced examples.

Internal Qualitative Primary

External Quantitative Secondary

P4.3 – Market Research and Planning – Types – Quantitative


P3.1 – Task 01 – Discuss the nature of Strategic and Operational Objectives with examples of how marketing can benefit achieving each.P3.1 – Task 02 - Describe the Strategic and Operational objectives of a selected organisation and explain how it uses marketing research to contribute to the development of these objectives.P3.2 – Task 03 – Discuss the Ansoff Growth matrix with examples of how marketing can benefit achieving these stages.P3.2 – Task 04 – Apply the Ansoff Growth matrix to a selected organisation and explain how it uses marketing research to contribute to the development of these stages.P3.3 – Task 05 – Discuss the importance of having a marketing plan and explain how this can benefit the planning for your chosen business..P3.4 – Task 06 – Discuss the importance of Mission Statements and Audits and explain how this can benefit the marketing planning for your chosen business with examples.P3.6 – Task 07 – Discuss the importance of Determining the right Strategy, Implementing the right Market Techniques and effective Monitoring and Evaluation of a marketing campaign and explain how this can benefit the marketing planning for your chosen business with examples.P4.1 – Task 08 - Using either of the two Case Studies, Tesco’s or Halfords, define the function and use of Market research.P4.2 – Task 09 – Discuss how Market research can help define the audience needs, intentions and benefit the business in target marketing.P4.3 - Task 10 - Describe the features of Information Sources and outline the advantages and disadvantages of each.P4.3 – Task 11 – For your chosen company describe the Sources of information used with evidenced examples.

Assessment Tasks – P3 and P4

OCR Cambridge TEC - Level 3 Certificate/Diploma Business LO2 - Be able to use marketing research and...

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