2.2 Market research

• Market research

  The collection of data on customer habits to help decision making in marketing

  About identifying and understanding customer needs in order to produce goods and services to meet these
• 4 P's


  Price , product, place and promotion ( and packaging) - info produced helps decide marketing strategy
• Market research aims to find out what info about target market?

  • Age
  • Economic status (rich, poor , want high or low quality)
  • Culture (what motivates them, what they enjoy)
  • Where they are
  • What they want in a product or service (style or function, size , hot or cold)
• Good market research


  Helps business be successful and avoids expensive mistakes by finding out:

  • Product or service customer wants
  • Price customers willing to pay
  • Design of product that will be attractive to customers
  • How many products customers will buy so how many to buy in or make
  • How to target customers - language, media , what message
  • Where and how to sell goods and services
• Target market


  A group of customers whom a business aims to sell its products. May be other businesses or consumers
• Info collected in market research must be interpreted correctly to:

  • understand significance to business
  • help marketing decision makers choose marketing strategy which best meets needs of target market
• No market research or poor market research means?


  Changes of success of a business reduced
• Benefits vs costs of market research


  Costs money but if used effectively repayed as sales revenue
• Primary research


  Data collected first hand e.g. questionnaires, interviews and focus groups
• Questionnaire 


  A set of questions sent out to selected people in the post or online
• Advantages of questionnaires

  • Cheap to carry out
  • Easy to target customers
• Disadvantages of questionnaires

  • People may not understand questions
  • People may not be interested in product so may be dishonest or not answer
• Interview 


  Person asks individual or group of people questions in person or on phone and records answers
• Advantages of interviews

  • Questions can be explained
  • Easy to target certain types of consumers
• Disadvantages of interviews

  • Expensive method
  • Not everybody likes to be interviewed
• Trialling


  A product sold for a short period , usually in one region of a country. If it sells well goes into full production
• Advantages of trialling

  • Good way to see if product is what people want
  • Reduces risk involved in producing large quantities
• Disadvantages of trialling

  • People or area tested must be representative of total market or findings won't help
• Focus group


  Small group of people asked to use product or think about ad and give opinion. Feedback helps re-design product or advert
• Advantages of focus groups

  • People chosen representative of potential customers
• Disadvantages of focus groups

  • Only a small group
  • Usually costly
• Secondary research


  Collection of data using research and info provided by others e.g. magazines, journals and the internet
• UK Census Data


  National census finds info about UK households every 10 years, including no in each , income and where they live
• Advantages of UK Census Data

  • Info comes from a lot of people
  • Already collected and analysed- reduces costs
• Disadvantages of UK Census data

  • Info not collected to meet specific needs of business
  • Info needs careful interpretation
• Data from newspapers and magazines

  Articles in publications describe people's interests and current fashions
• Advantages of data from newspapers and magazines

  • Up to date
  • Cheap
  • Good source of ideas
• Disadvantages of data from newspapers and magazines

  • Info general and not specific to business
• Data from websites 


  Info about other companies can be found e.g. what they sell and prices they charge
• Advantages of data from websites

  • cheap to collect
  • readily available
  • can help decide what to produce and price to charge
• Disadvantages of data from websites

  • Info needs careful interpretation
• Internal data

  Data collected by business about e.g. past sales and profits or customer feedback
• Advantages of internal data

  • cheap to collect
  • readily available and specific to business
• Disadvantages of internal data

  • historical - looks at past not future
• Influences of choosing primary or secondary research

  • How much they can afford to spend(some willing to spend lots on primary , some can only afford secondary)
  • What info required (first hand from primary , info about competitors or local community from secondary)
  • Location of customers (questionnaire or interview on the phone good for another country, local newspaper may give info about certain town)
  • How quick info needed (quicker to use secondary)
• Qualitative data 


  Based on opinions of those asked - usually collected using primary research
• Advantage and disadvantage of qualitative data


  A - helps business understand what customers are thinking or what they want

  D- info may only be provided by limited no
• Quantitative data


  Based on facts or numbers
• Advantage and disadvantage of quantitative data


  A - easier to analyse than qualitative -can be gathered from lots

  D- limits how much people can say about likes or dislikes