3.2: Market research Flashcards
Def. Market Research
This is the process of collecting, recording and analysing data about the customers, competitors and the market.
Why is market research necessary? (4)
To reduce the risks associated with new product launches
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 packages for a product.
What’s the market research process? (1 ,2)
Management problem identification: by setting out the problem accurately, the process can be directed accurately, without any unnecessary data gathered. e.g. Why are our sales falling?
Research objectives: Must be set in the way that would provide all the information needed once accomplished. E.g. How many are likely to buy are products in country X?
Sources of data - primary and secondary research.
Market process number 3: Definitions.
Sources of data - Primary and secondary research
Primary research: new research, carried out to answer specific issues or questions. It can involve questionnaires, surveys or interviews with individuals or small groups. Secondary research: makes use of information previously researched for other purposes and publicly available.
What are the sources of secondary data? (7)
Government publications e.g economic trends
Local libraries and local government offices
Trade organisations e.g Engineering Employers Federation
Market intelligence reports e.g Key note report
Newspaper reports and specialist publications e.g The financial times
Internal company records e.g customer sale records
The internet
What are the advantages and disadvantages of primary research? (2 2)
Advantages:
* New data
* Specific to your needs
Disadvantages
* May take longer to gather
* May be expensive
What are the advantages and disadvantages of secondary research? (3 3)
Advantages:
* Often cheap
* Obtained quickly
* Allows comparison of data of different source
Disadvantages:
* Out-of-date
* Data might not be relevant
* Not applicable for new product development (NPD)
What are the two methods of primary research? Definitions
Qualitative research: Research into the in depth motivation behind the consumer buying behaviour or opinions.
Quantitive research: research that leads to numerical results that can be statistically analysed.
Def. Focus Groups
A group of people who are asked about their attitude towards a product, service, advertisement, or new style of packaging. Is a way to collect qualitative research.
What are the advantages and disadvantages of focus groups? (3 2)
Advantages:
* Can be used as primary research
* Data tends to be more accurate and realistic
* Can have discussions.
Disadvantages:
* Time-consuming
* Difficult to analyse and to present
What are the quantitive research techniques? (2)
Observation and recording: recording only what actually happens, no explanations.
Test marketing: to promote and sell the product in limited geographical scale and record data.
What are the four important issues for market researchers to be aware of when conducting consumer surveys?
Who to ask? Selecting a sample that reflect the characteristics of the survey population.
What to ask? Questionnaire must be unbiased and unambiguous for it to be effective.
How to ask? By telephone, or hard copy questionnaires or online questionnaires.
How accurate is it? Assessing the likely accuracy and validity of the results.
Who to ask?
Def. Sample
The group of people taking part in a market research suvey selected to be representative of the overall target market.
What are the sampling methods? (3)
. Simple random sampling: the samples are gathered in a process that gives all the individuals in the population equal chances of being selected.
. Stratified sampling: when target populations have a lot of strata, interviewer chooses random sample from all strata.
. Quota sampling: interviewer selects an appropriate number of respondent from each stratum in a stratified population.
What to ask?
Questionnaire design:
Open questions: those that invite a wide-ranging or imaginative response - the results will be difficult to collate and present numerically. e.g question: What do you think about this product?
Closed questions: Questions to which a limited number of pre-set answers is offered. e.g do you like this product? yes or no.
What other factors make a questionnaire effective? (6)
Make the objective of the questionnaire clear to make clear questions
Write clear questions
Try to make sure questions are in order
Avoid biased questions
Use clear language
Include some question that will allow classification of the sampler.
How to ask?
Self completed questionnaires or interviews?
Questionnaires could be limited to only people who have spare time such as retired people. While interviews can be conduct from people on the street, which gives a wider variety of the type of people and allows follow up questions, but is a lot more expensive.
What affects primary research’s accuracy?
Sampling bias: The only accurate method would be asking the whole population.
Questionnaire bias: May occur when question leads respondents to one particular answer - biased questions.
Other form of bias: such as respondents lying in their answers.
What are the types of data presentation? (5)
Table
Bar charts
Histograms
Line graphs
Pie charts
Pictograms
What are each type of data presentation most useful for?
Table: when there’s wide range of results, or a lot of text
Bar charts: when absolute size needs to be compared
Histograms: can represent frequency data and show mode
Line graphs: when there’s time or a trend
Pie charts: shows relative importance of sections out of total result
Pictograms: to attract readers to look at the results.
What type of averages are there?
The arithmetic mean
Mode
Median
Def. Arithmetic mean
Calculated by totalling all the results and dividing by the number of results.
e.g (4+5+6)/3
Def. Mode
The value that occurs the most frequently in a set of data.
Def. Median
The value of the middle item when data have been ordered.
Def. Range
The difference between the highest and lowest value.
Def. the validity of market research
The validity of market research refers to how accurate
the findings of market research are.
Def. the reliability of market research
The reliability of market research refers to the extent to
which the same results would be received if the research
was conducted again.
