market research

• what is Market Research?

  Gathering information about consumers' needs or preferences in a market
• what is the role of market research

  • Identify demand for the product and how much they are willing to pay.
  • Identifying the target audience is the most effective way to promote to these customers.
  • To measure the competitiveness of the market and the best way to compete with it.
• what are the two types of business

  • Product-Oriented Business
  • A market-oriented business
• define product-oriented

  Product-Oriented Business: a business that focuses mainly on the product, disregarding market needs and wants.
• what does product-oriented often produce

  Often, it produces necessities for living, such as agricultural tools or fresh food.
• product Oriented

  • It may not have a brand name.
  • Producers’ main concern is price and quality.
  • Risky due to the large market and many competitors.
• what is a market-oriented business

  A market-oriented business is a business that focuses on market research and finding out what the customer wants BEFORE a product, such as clothing or electronic devices, is developed.
• market-oriented

  • Better able to survive because of more adaptability to changes in customer taste and trends.
  • Takes advantage of new market opportunities.
• what are the market research methods

  • Quantitive information (quantity related)
  • Qualitative information (where opinion or judgement is necessary).
• what is primary research

  Gathering ORIGINAL data by directly contacting existing customers/potential customers.
• primary research advantages

  -Up-to-date and relevant

  -Usually planned and carried out by people who want to use the data first-hand.

  -It is most effective when used for a specific problem.

  -Not available to business
• primary research disadvantage

  Expensive in both time and money

  Not available immediately
• what is the process for primary research

  • Purpose of market research
  • Decide on the most suitable method of market research
  • Decide the size of the survey and who is going to be asked.
  • Carry out the research
  • Analyse the data and results
  • Produce a report of the findings
• what are the Methods of Primary Research

  Questionnaires

  Interviews

  Focus Groups

  Sampling
• define Questionnaires

  • They may be conducted face-to-face, by telephone, or online.
• Advantages for questionnaires

  Detailed qualitative information can be gathered.

  The customer’s opinion can be obtained.

  Online surveys may be cheaper and make it easier to collate the results.

  They can be linked to prize draws and encourage people to fill them.
• Disadvantages for questionnaires

  If questions are not well-thought-out, answers may mislead the business, as there may not be accurate answers.

  Lots of time and money are needed.

  Collating and analysing data also takes a long time.
• define Interviews

  A person will interview another person and ask questions
• advantages for interviews

  • The interviewer will be able to explain the questions and clear confusion.
  • Detailed information about the interviewee can be gathered.
• disadvantages for interviews

  • The interviewer may lead the interviewee to answer in a certain way.
  • It is time-consuming and Expensive.
• define Focus Groups

  collect opinions and feedback from a group of people about a specific product, concept, or service.
• advantages for focus groups

  Provide detailed information

  Interacting between members can help businesses understand the reason for peoples’ opinions.

  Quicker and cheaper than individual interviews.
• Disadvantages for focus groups

  It is time-consuming and expensive if done by a specialist market research agency.

  The discussion could be based on some people being influenced by the opinions of others.

  A few people can dominate it, so researchers must have experience dealing with this.
• define sampling


  A group of people who are selected (randomly) to respond to a market research exercise (i.e. questionnaire).
• 2 standard methods of sampling:

  Random Sample

  Quota Sample
• define Random sample

  A Random Sample is when people are selected randomly as a source of information for market research.
• advantage for random sample

  Advantage: Everyone has an equal chance to be picked, but not everyone in the population may be a product consumer
• define Quota Sample

  A Quota Sample: People are selected based on specific characteristics. They can find out the views of a specific group.
• Advantage for quota sample

  Advantage: can find out the views of these specific groups
• define Secondary Research

  • Information that has already been collected and is available to others
• Benefits for secondary research

  • It is cheaper than primary as research has already been done by others
  • There is some information (i.e. economic forecasts or population size) that can’t be obtained by primary research
• Limitations of secondary research

  • You do not get specific results for a particular product or service; you get broad results
  • Data may be outdated or incorrect as others collected it
  • It might not have the specific information
• • Internal Sources of secondary data – within the firm’s own records:
  • Sales department records, price data, customer records, sales reports, etc.
  • Opinions of distribution and public relations personnel
  • Finance department.
  • Customer service department
• • External Sources of Secondary Data:
  • Government Statistics: a detailed source of general information (ex: population and its age structure)
  • Newspapers: useful articles about the general economy state
  • Trade Association: information about business in the industry
  • Market Research Agencies: specialist agencies researching on the company’s behalf; the commission is paid.
  • Internet: easily accessible source. Paper-based sources can also be found.
• • Regardless of which type of research a business chooses to use, the accuracy of the research data depends on the following:
  • How carefully the sample was drawn up
  • How the questions in questionnaires/interviews were phrased to ensure honest answers were given.
  • The sample itself and its size. By using quota sampling, you might get more reliable results.
  • The bias – some secondary research will be biased (i.e. articles in newspapers), which means the information might be unreliable
  • Age of the information: older data might be inaccurate.
• Presentation of data from market research:

  • Tables or tally chart
  • Pie Chart
  • Diagram
  • Bar chart
  • Line graph