market research

• what is the definition of market research ?

  the process of gathering primary and secondary data on the buying habits, lifestyles, usage and attitudes of actual and potential customers.
• what are the general benefits of market research ?

  • Can identify opportunities and threats, i.e. changes.
  • Can be used to monitor sales after a promotional

  campaign.

  • Can help them find alternative routes to overcome a

  problem

  • Identify target market
  • Reduce risk of failure
• what are the general drawbacks of market research ?

  • Research does not guarantee success.
  • It is costly in time
  • Often all that is needed is good intuition or a hunch
  • Costs money
  • Research can be unreliable
• what are the reasons for carrying out extensive market research(pt1)


  • An aid to decision making – helps to make informed decisions especially important in fast changing markets.
  • To find out about customer wants and expectations.
  • To suggest introduction of new products, modification of existing products.
  • To find out how much customers are willing to pay/developing pricing strategies.
  • To gain competitive advantage/keep pace with competitors/find out what they are doing.
  • Predictive reasons – what is likely to happen in the future.
  • Exploratory reasons – investigating new possibilities in a market.
• what are the reasons for carrying out extensive market research(pt2)


  • Descriptive reasons – what is happening in the market? Who is buying which products in our portfolio?
  • Explanatory reasons – for example to find out why have sales fallen in the last six months
  • Carrying out market research means that consumers may feel that their views are being considered.
  • Reduces risk – without market research a business may spend large sums of money developing and launching unsuccessful products.
• Why might market research predict a product's success inaccurately?

  Consumer responses may change over time
• What can cause sampling variation in market research?

  Statistical bias
• How can a poorly constructed questionnaire affect market research?

  It can lead to biased results
• What is a limitation of secondary research data?

  It may not meet specific business needs
• What is a potential drawback of primary research?

  It can be expensive to conduct
• What is a common issue with secondary data in fast-changing industries?

  It can be outdated
• Why can gathering primary research data be problematic?

  It is often time-consuming
• What are the reasons against conducting extensive market research?

  • Predictions may not reflect future outcomes
  • Sampling variation can cause statistical bias
  • Poorly constructed questionnaires lead to bias
  • Secondary data may not meet specific needs
  • Primary research can be costly
  • Secondary data can be outdated
  • Primary research is time-consuming
• what is the definition of primary research ?

  (field research) – collecting primary data – collecting information that does not already exist . It is collected for a specific purpose. Most primary information is gathered through questionnaires, interviews, surveys, focus groups, consumer panels
• what are the advantages of primary research ?

  • The research carried out is only available to that

  business – this will enable it to gain market

  advantages over rival firms

  • It is up to date information, thereby enabling better

  decision making

  • It can be targeted for specific needs that the

  business may have identified
• what are some disadvantages of market research ?

  • Can be very expensive to collect – could the money have been better utilised using secondary research
  • Can be very time consuming to collect so that by the time it has been collected and analysed the market may have changed
  • Can have problems of bias
• what is secondary research definition ?

  (desk research) – identifies, collects and collates information which is already in existence. This can be collected internally or externally. It may be existing business documents, official publications, yellow pages, industry magazines, online desk research.
• advantages of secondary research ?

  • It is inexpensive to collect and quick to obtain
  • Enables cost-effective analysis of several data

  sources
• what are the disadvantages of secondary research ?

  • Often out of date
  • Might not be available
  • Little control over quality
  • Problems of interpretation
• what is quantitative research ?

  Involves the collection of data that can be measured. This means the collection of statistical data such as sales figures and market share. Surveys and the use of government publications/existing statistics

  • Researcher uses tools, such as questionnaires and surveys to collect numerical data.
  • Researcher knows clearly in advance what he/she is looking for.
  • Recommended during latter phases of research projects.
  • Is usually regarded to be less open to interpretation than qualitative data (objective).
  • Data is in the form of numbers and statistics.
• what is qualitative research ?

  Involves collection of data about attitudes, beliefs and intentions. Focus groups, participant observation and interviews are common methods used to collect qualitative data.

  • Researcher may only know roughly in advance what he/she is looking for.
  • Recommended during earlier phases of research projects.
  • Can be time consuming to collect and may be difficult to draw general conclusions.
  • Information gathered is often open to high degree of interpretation (subjective)
  • Data is in the form of words, pictures or objects
• what is a sample

  a group of respondents to a market research exercise who are selected to be representative of the views of the target market as a whole.
• what is quota sampling

  the population is segmented into a number of groups which share specific characteristics .The sample is often segmented on the basis of age or sex – known as the demographic profile.

  -This is a relatively cheap method of sampling compared to many others.

  -Results using quota sampling cannot be regarded as statistically representative of the population

  –they are not randomly chosen.
• what is random sampling ?

  every member of the population has an equal chance of being interviewed. This is not easy to achieve and must not be

  confused with haphazard sampling. Random samples are drawn from local electoral registers and interviewees are contacted at home.

  • The interviewer must call three times before giving up on the address – this is to overcome the fact that busy people are those least likely to be at home at certain times.
  • Attempting to achieve randomness in this way creates expensive fieldwork costs so many businesses tend to adopt quota sampling instead.
• sample size in market research

  • The size of the sample used is very important as it needs to be large enough to make the data statistically valid.
  • If sample size is large the research will take a long time and may be very expensive.
  • if the sample size is too small then there is a greater chance that random factors will make the results inaccurate.
  • This gives large businesses with big marketing budgets a significant advantage over smaller businesses – a good example of an economy of scale.
• bias in market research ?

  something that may cause data within a sample to be weighted towards one side. Such statistical bias occurs when a sample has an overweight towards one subgroup.
• what is done to avoid bias

  To avoid bias and collect data that is statistically valid, sampling methods, such as random sampling and quota sampling, must be used to determine the market research sample.