11. Market research

• Market research is the process of gathering analysis and information about a market and customers
• role of market research is to answer these:

  • would they buy
  • what price
  • where
  • what feature
  • what type
  • what promotion
  • how strong competition
• • Product-Oriented Business: a business that focuses mainly on the product, disregarding market needs and wants. Often agricultural tools or fresh food.
  • It may not have a brand name.
  • Producers’ main concern is price and quality.
  • Risky due to the large market and many competitors.
• • 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.
  • Better able to survive because of more adaptability to changes in customer taste and trends.
  • Takes advantage of new market opportunities.
• Market Research Methods:

  • Quantitive information (quantity related)
  • Qualitative information (where opinion or judgement is necessary).
• • Primary Research: Gathering ORIGINAL data by directly contacting existing customers.
  • Pros:
  • up to date
  • effective for a specific problem
  • not available to other businesses
  • cons:
  • Expensive in both time and money
• • Questionnaires
  • They may be conducted face-to-face, by telephone, or online.
• Interviews: A person will interview another person and ask questions.
• • Focus Groups: collect opinions and feedback from a group of people about a specific product, concept, or service.
• • Secondary Research:
  • Information that has already been collected and is available to others
• • Internal Sources of secondary data – within the firm’s own records:
  • Sales department records, price data, customer records, sales reports, etc.
  • Finance, Customer service department.
  • External Sources of Secondary Data:
  • Government Statistics: a detailed source of general information
  • Newspapers: useful articles
  • 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