Understanding Market Concepts and Research Techniques
Item 14: Market Concepts and Classes
From a marketing point of view, a market must be understood as a set of persons (natural or legal) that meet the following requirements:
- They feel a need.
- They have buying power.
- They are willing to buy.
Markets can be classified according to various criteria: the type of demand, the level of competition, opportunities, and geographic expansion.
Types of Demand
Depending on the type of demand, there are different market classifications:
- Consumer Market: These markets cater to final consumers (individuals) to meet their needs. They can be further classified as:
- Markets for Immediate Consumption: Goods exchanged are for single use and generally disappear upon consumption.
- Consumer Durables Markets: Goods exchanged support more than one use.
- Service Markets: Goods traded are of an intangible nature.
- Organizational Market: These markets cater to companies or other organizations to acquire products needed to conduct their business.
Level of Competition
Depending on the level of competition, markets can be:
- Monopoly: Only one bidder.
- Oligopoly: A small number of bidders.
- Perfect Competition: A high number of bidders with a uniform offer.
- Monopolistic Competition: A high number of bidders with a differentiated offer.
Market Expansion Opportunities
Depending on the opportunities for market expansion, we can distinguish:
- Current Market: Current users of the product.
- Potential Market: Consumers who could become consumers of the product in the future with an appropriate marketing strategy.
- Market Trend: Indicates where the market evolves, regardless of the actions of companies.
Geographic Area
According to the geographic area where the company markets its products:
Local market, regional market, national market, or international market. In the case of multinational companies that sell their products in most developed countries, there is talk of global markets.
Item 15: Market Research Techniques
The techniques most widely used in market research are:
Qualitative Methods
Information is obtained from small groups that are not statistically significant. The purpose is to achieve a reasonable understanding of the problem. Within these methods, the following are emphasized:
- Focus Group or Group Interview: Consists of a free discussion on a topic of interest to a group of 8 to 15 people. Its aim is to understand the motivation of consumers.
- Interviews and Projective Techniques: An example is conducting a test where, by word association, potential customers are sounded out to choose a brand.
Quantitative Methods
Information is obtained from statistically significant surveys of the target population. The steps that follow are:
- Sounding Survey: Involves the determination and population statistics of the sample unit, which must be meaningful and representative of the problem being analyzed. For example, you can choose to study household consumer products.
- Determination of Sample Size: It must be statistically significant in size and composition of the sample, which is achieved through proportionality criteria, with representation from different strata.
- Questionnaire Design: The advantage is that the survey brings together a wealth of information that can be measured and analyzed systematically.
- Mix Design of the Survey and the Questionnaire: The mix design of the survey has an impact on the cost. The survey can be telephone, email, etc.
- Organization of Fieldwork: A very important task is the selection of interviewers so as to guarantee the seriousness of the fieldwork.
- Statistical Treatment of Results and Drawing Conclusions from Research: This is the final phase and should be performed with much rigor.
Panels: Dynamic Surveys
These require the same people (permanent exhibition) to respond to the same questionnaire at regular intervals. It is possible to track trends in attitudes and opinions, reflecting static and dynamic behavior.
The panels are widely used to monitor demand and purchase, and identify changes in consumer habits. Its greatest drawback is the high cost, although there are specialized companies that have numerous clients, including sharing of the costs through subscriptions. There are different types of panels (consumers, retailers, etc.).