Business

• Market Research


  The process of gathering, analysing and interpretating information about a market
• Role of market research

  • Find out whether people would buy the product
  • What consumers like and hate about it
  • The price consumers would pay for it
  • Who would buy the product
  • What their competitors are offering
• Product-orientated business


  A business whose main focus of activity is on the product itself. They produce a product then try to convince people to buy it. These products might be basic necessities that do not have a brand name.
• Market-orientated business


  A business which carries out market research to find out consumer wants before a product is developed and produced.
• Market research methods


  • Quantitative information (answers in form of quantity/numbers)
  • Qualitative information (answers questions where an opinion or judgement is required)
• Primary research


  The collection and collation of original data via direct contact with potential or existing customers
• Types of primary research methods

  • Online surveys
  • Questionnaires
  • Interviews
  • Focus group
• Process of primary research

  1. Questionnaires

  2. Online surveys

  3. Interviews

  4. Focus group
• Questionnaires


  A set of questions to be answered as means of collecting data for market research
• Advantages of Questionnaires


  • Detailed information can be collected
  • Customer's opinions about the product can be obtained
  • Online surveys will be cheaper and easier to collate and analyse
• Disadvantages of Questionnaires


  • If questions are not clear or are misleading, then unreliable answers will be given
  • Time-consuming and expensive to carry out research, collate and analyse them
  • Can be linked to prize draws and prize draw websites to encourage customers to fill out surveys
• Online surveys


  Require the target sample to answer a series of questions over the internet
• Advantages of online survey

  • Fast, with quick response times than other forms of survey
  • Cheaper than interviews or postal questionnaires
  • Easy to complete for the participant
  • Data collected can be quickly presented and analysed using IT tools
• Disadvantages of online survey

  • No one to explain the open-ended questions or to asked for more detailed information
  • Cannot reach potential respondents who do not have access to internet
  • Scope for frauds: people might not give honest answers, they may just do it for the incentives
• Interviews


  Involve asking individuals a series of questions often face-to-face or over the phone
• Advantages of Interviews

  • The interviewer is able to explain any questions that the interviewee is not able to understand
  • Detailed information can be gathered about what the interviewee like or dislike about the product
• Disadvantages of Interviews

  • The interviewer can mislead the interviewee into answering into a certain way
  • Time-consuming to carry out and expensive way of gathering information
• Focus Group


  A group of people who are representative of the target market and agree to provide information through a group discussion with researcher present
• Advantages of focus group

  • They can provide detailed information about the consumer's opinions
  • Quicker and cheaper than individual interviews
  • Interaction between members of the group can help the business understand the reason for people's opinion
• Disadvantages of focus group

  • Discussion can be biased if some people on the panel are influenced by the opinions of others
  • Can be dominated by just a few people
• Advantages of Primary research

  • It is up to date and relevant to the business
  • It is usually planned and carried out by people who want to use the data
  • It is more effective when it is used to gather information which will help the business with a specific problem
• Disadvantages of Primary research

  • It can be expensive
  • It can take time to collect, hence not available immediately
  • It is not available to other businesses
• Sampling


  A group of people who are selected to respond to a market research exercise
• Methods of Sampling

  • Random sampling (every member of the population has an equal chance of being selected)
  • Quota sampling (people are selected on the basis of certain characteristic, for example age or gender)
• Secondary research/Desk research


  Uses information that has already been collected and is available for use by others
• Internal sources of information

  • Sales department's sales records, pricing data, customer records, sales reports
  • Opinions of distributors and public relations officers
  • Finance department
  • Customer Services department
• External sources of information

  • Government statistics
  • Newspapers
  • Trade associations
  • Market research agencies
  • Internet
• Advantages of Secondary research

  • It is inexpensive/cheap compared to primary research
  • Information and data is readily available
  • It allows business to quickly and cheaply analyse and compare information from a variety of sources
• Disadvantages of Secondary research

  • The information can be outdated and no longer applicable
  • Competitors and rivals may also have access to the same data
• The reliability and accuracy of market research data depends upon a large number of factors
• Factors affecting accuracy of market research data

  • How carefully the sample was drawn up, its size, the types of people selected etc.
  • How questions were phrased in questionnaires and surveys
  • Who carried out the research: secondary research is likely to be less reliable since it was drawn up by others for different purpose at an earlier time
  • Bias: newspaper articles are often biased and may leave out crucial information deliberately
  • Age of information: researched data shouldn't be too outdated. Customer tastes, fashions, economic conditions, technology all move fast, and the old data will be of no use now
• Data handling methods to present market research data

  • Tally Tables
  • Charts (bar/column charts, pie charts)
  • Graphs
• Sole trader - one person who owns the business and has complete control over it.
• Marketing


  Identifying customer wants and satisfying them profitably
• What you should be able to do by the end of this unit

  • Identify the role of marketing
  • Explain why market changes
  • Explain how business can respond to changing customer needs and increased competition
  • Explain the differences between niche and mass market
  • Explain how the market can be segmented
  • Recommend and justify an appropriate method of segmentation in given circumstances
• Market


  All buyers and sellers of a particular good
• Customer

  A person, business or other organisation which buy goods or services from a business
• Role of marketing


  • Identify customer needs
  • Satisfy customer needs
  • Maintain Customer loyalty
  • Anticipate changes in customer needs
• Identify Customer needs


  1. Find out what kind of products or services customer wants

  2. The price they are willing to pay

  3. Where and how they want to these goods and services

  4. The after-sales they might want
• Satisfy customer needs


  The goods and services should meet the needs of customer so that it can be sold profitably