Market research

• Market research is needed for any business to find out what people want to buy and how many people are going to buy that product before producing it
• Market research aims to answer questions such as:

  • What features of the product do people like/dislike?
  • Are people willing to buy the product?
  • What price are people prepared to pay?
  • Location of the selling point of the product
  • Type of customer who buys the product
  • Type of promotion that will be effective
  • Competition in the same industry
• Businesses need to know these things to be more competitive and meet consumer wants
• Two main types of information that can be gathered from market research are:

  • Qualitative information: information where opinion or judgement is necessary
  • Quantitative information: information about the quantity of something
• Two ways to gather information for market research are:

  • Primary research or field research
  • Secondary research or desk research
• Primary research involves gathering original data which may require direct contact with customers
• Ways to conduct primary research include:

  • Questionnaires
  • Interviews
  • online surveys
  • focus groups
• Questionnaires, interviews, and consumer panels are all types of surveys
• The process of primary research involves:

  1. Identifying the purpose of the market research

  2. Deciding on the best method of research

  3. Deciding on the size and type of sample

  4. Carrying out the research

  5. Collating data and analyzing results

  6. Producing a report
• Questionnaires:

  • Involve asking people questions
  • Pros: Detailed qualitative information can be gathered, customers' opinions can be gathered
  • Cons: Bad questions could mislead customers, takes time and money to collate results
• Interviews:

  • Face-to-face conversations with customers with prepared questions
  • Pros: Interviewer can explain questions, detailed information about customers' opinions
  • Cons: Interviewer bias, time consuming and expensive
• Samples:

  • A group of people chosen for market research
  • Random sample: random people selected
  • Quota sample: people selected based on certain characteristics
• Secondary research involves taking information already collected by others. It is also cheaper.
• Internal sources of information:

  • Data collected from past researches
  • Examples: Sales department, finance department, customer service department
• External sources of information:

  • Data collected from sources outside the business
  • Sources: Internet, trade and employer associations, specialist journals, research reports, newspapers, government reports and statistics, market research agencies' reports
• Secondary research is a cheaper way of obtaining information and gains access to data that cannot be gathered by primary research
• Accuracy of market research information:

  • Depends on how research was conducted and how carefully samples were selected
  • Ways to make information more accurate: Sample needs to be representative, larger sample for more accuracy, questionnaires need to be tested for misinterpretations
• Concerning secondary research: Data collected by others may not be accurate, data can be out of date
• Information collected from market research should not be assumed to be completely correct
• How to design and use a questionnaire:

  • Questions to ask: What do I need to find out? Who do I need to ask? Where will I carry out my questionnaire?
• Secondary data refers to existing data that has been gathered by someone else for another reason.
• Primary research

  • Advantages

  1. Up to date and relevant to the business
  2. Detailed qualitative information can be gathered
  3. Not available to other businesses