3.2 – Market Research

• Market research: the process of gathering, analysing and interpreting information about a market
• Product orientated: a business whose main focus of activity is on the product itself
• Market orientated: business that carries out market research to find out consumer wants before a product is developed and produced.
• Marketing budget: a financial plan for the marketing of a product or product range for some specified period on time.
• Primary research: the collection and collation of original data via direct contact with potential or existing customers.
• Secondary research: information that has already been collected and is available for use by others
• Questionnaire: a set of questions to be answered as a means of collecting data for market research.
• Online survey: a survey that requires the target sample to answer a series of questions over the internet
• Interview: asking individuals a series of questions, often face-to-face or over the phone
• Focus group: a group of people who are representative of the target market.
• Sample: a group of people who are selected to respond to a market research exercise
• Random sample: when people are selected at random as a source of information for market research.
• Quota sample: when people are selected on the basis of certain characteristics as a source of information for market research.
• Questionnaire:

  • Advantages:
  • 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
  • Can be linked to prize draws and prize draw websites to encourage customers to fill out surveys
  • Disadvantages:
  • Questions are not clear, misleading => unreliable answers given
  • Time-consuming and expensive to carry out research, collate and analyse them
• Interviews:

  • Advantages:
  • Able to explain questions that the interviewee doesn’t understand and can also ask follow-up questions
  • Can gather detailed responses and interpret body-language => accurate conclusions about the customer’s opinions.
  • Disadvantages:
  • The interviewer could lead and influence the interviewee to answer a certain way
  • Time-consuming and expensive to interview everyone in the sample
• Focus Groups:

  • Advantage:
  • They can provide detailed information about the consumer’s opinions
  • Disadvantages:
  • Time-consuming
  • Expensive
  • Opinions could be influenced by others in the group.
• Observation:

  • Advantage:
  • Inexpensive
  • Disadvantage:
  • Does not tell the firm why consumer buys them (basic figures)
• 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
• Accurate depends on:

  • sample size
  • sample selection
  • primary/secondary
  • bias
  • quality of research methods
• Presenting results:

  • tables - many figures
  • bar chart - show totals/sub totals
  • pie chart - show proportions
  • graphs - show trends