3.15 Market research Flashcards
Market research
The process of collecting, recording and analysing data about the customers, competitors and the market
Primary research
The collection of first-hand data that’s directly related to a firm’s needs
Secondary research
Collection of data from second-hand sources
Qualitative research
Research into the in-depth motivations behind consumer buying behavior or opinions
Quantitative research
research that leads to numerical results that can be statistically analysed
Focus groups
A group of people who are asked about their attitude towards a product, service, adverts or new style packaging
Sample
The group of people taking part in a market research survey selected to be representative of the overall target market
Random sampling
Every member of the target population has an equal chance of being selected
Systematic sampling
Every nth item in the target population is selected
Stratified sampling
Draws a sample from a specified sub-group or segment of the population and uses random sampling to select an appropriate number from each stratum
Quota SAMPLING
When the population has been stratified and the interviewer selects an appropriate number of respondents from each stratum
Cluster sampling
Using one or a number of specific groups to draw samples from and not selecting from the whole population
Open questions
Invites a wide-ranging or imaginative response - results will be difficult to collate and present numerically
Closed questions
Questions to which a limited number of pre-set answers is offered
The need for market research
- To reduce the risks associated with new product launches
e.g: Identify consumer needs and tastes -> primary and secondary research into consumer needs and competitors
Product idea and packaging design -> testing of product and packaging with consumer groups
Brand positioning and advertising testing -> pre-testing of the product image and advertisement
Product launch and after launch period -> monitoring of sales and consumer response - To predict future demand changes
- To explain patterns in sales of existing products and market trends
- To assess the most favoured designs, flavours, styles, promotions and packaging of a product
The market research process
- Management problem identification
- Research objectives
- Sources of data - primary and secondary research
Secondary: a, Gov. publications
b, Local libraries and gov. offices
c, Trade organisation
d, Market intelligence reports
e, Newspaper reports and specialist publications
f, Internal company records
g, The internet
Primary: Quantitative and qualitative
Quantitative research techniques
a, Observation and recording
b, Test marketing
c, Consumer surveys
Probability sampling
- Simple random sampling
- Systematic sampling
- Stratified sampling
- Quota sampling
- Cluster sampling
Non- probability sampling
- Convenience samling: members of the population are chosen based on their relative ease of access
- Snowball sampling: The first respondent refers a friend and then a friend of the one who is referred … -> cheap but biased since friends are likely to have similar lifestyle and opinions
- Judgemental sampling: The researcher chooses the sample based on who they think would be appropriate to study
- Ad hoc quota: A quota is established and researchers are told to choose any respondent they wish up to the pre-set quota..
Problems with primary research
- Sampling bias: the results from a sample may be different from those that would have been obtained by the entire population
- Questionnaire bias: Questions tend to lead respondents towards one particular answer
- Respondents not answering in a truthful way.
Ads of secondary research
+ Often obtainable very cheaply
+ Identifies the nature of the market and assists with the planning of primary research
+ Obtainable quickly without the need to devise complicated data-gathering methods
+ Allows comparison of data from different sources
Disads of secondary research
- May not be updated frequently -> obsolete info
- It may not be entirely suitable or presented in the most effective way for the business to use it bc it was originally collected for another purpose
- Data-collection methods and accuracy = unknown
- Might not be available for completely new product dev.
Ads of primary research
+ up-to-date and therefore more useful than secondary
+ relevant - collect for a specific purpose - directly addresses the questions the business wants answers to
+ confidential - no other business has access to this data
Disads of primary research
- costly
- time consuming
- doubts over accuracy and validity - risk of the samples may not be representative
Cost effectiveness of market research
Internet and cellphones have facilitated contacting a wide range of potential consumers
Although it’s cheaper, it doesn’t mean it’s effective. –> answer after the research has been gathered and analysed
Presentation of data
- Bar charts: common, easiest to use and conduct
- Histograms: Measures relative frequencies from grouped data
- Line graphs: most commonly used for showing changes in a variable over time
- Pie charts: Used to display data that need to be presented in a way that the proportions of the total are clearly shown.
- Pictograms: Use to attract the reader towards looking at the data but it’s imprecise.
Arithmetic mean
Calculated by totaling all the results and dividing by the number of results
Mode
The value that occurs most frequently in a set of data
Median
The value of the middle item when data have been ordered or ranked.
Divides data into two equal parts
Frequency data
Showing median, mode, mean
Range
Difference between the highest and lowest value
Inter-quartile range
- The range of the middle 50% of the data
