4.4 Flashcards
Market Research
The systematic gathering, recording and analysing by those who provide goods and services of data about customers, competitors and the market.
Importance of Market Research
- Reduce risk associated with new product
- Identify and predict future demand changes
- Identify market segment buying the organisation’s products
- Discover how much customers are willing to pay
- Identify which competition exists
- Discover which promotion is appropriate
Methods of Market Research: Field
Information collected by the organisation itself or by a paid market research agency. First-hand data directly related to a firm’s needs. Known as PRIMARY information.
Methods of Market Research: Desk
Information already collected for another purpose (government statistics). Known as SECONDARY research.
Advantages Field Research
- Should be correct for the purpose for which it was gathered
- Can be kept private and can provide a competitive advantage
- Source of the information is known, more reliable
Field Research Disadvantages
- Costs can be high
- Research may be flawed (sampling bias)
- May be difficult and time consuming to gather
Desk Research Benefits
- Can be inexpensive and easy to access
- A wide variety of sources can be accessed
Desk Research Costs
- Research may not be relevant to organisations problem as it was collected for another purpose
- May be out of date
- Available to competitors
Types of information generated by market research
Quantitative information
Qualitative information
Quantitative information
Information that is definable:
- Numerical
- Can be measured
- Useful for making comparisons
- E.g. sales figures increased by 10%
Qualitative information
Information that is descriptive:
- Concerned with peoples feelings and emotions
- Useful when analysing people’s views on a product
- E.g. I prefer a big car
Methods of Primary Research
Involves the use of data which does not already exist and must be collected from scratch:
Surveys
Postal Surveys
Telephone Survey
Online Survey
Interviews
Focus Groups
Observation
Test Marketing
Surveys
Involve directly asking consumers -using a questionnaire- for their opinions and preferences. Both quantitative and qualitative data is gathered.
It is impossible and too expensive to ask all potential mombers of the target market so a sample is taken.
Designing a questionnaire
Must be written with an ibjective in mind. Must:
- Have an easy layout
- Be short and relevant
- Be clear
- Have questions in logical order
Closed questions: the interviwee is given a limited number of answers, easy to analyse and generate quantitative information.
Open questions: the interviewee is free to give any response, difficult to analyse and generate qualitative information.
Interviews
- The response rate in most forms of self-completed questionnaires is nearly always poor, questions can be misunderstood.
- Direct interviews are conducted by an interviewer, usually in the street or respondents home. This will avoid bias and follow up questions can be asked.
- This method can be expensive but the interviewer will continue their work until the pre-set sample size has been reached.
Focus Group
Groups of consumers are brought together to answer questions or try products.
- Led by market researchers on behalf of a business.
- All members are free to talk
- The discussion is often filmed
- Researches might lead or influence the conversation, leading to biased conclusions
Observation
Consumers are watched whilst in the store. Market researchers look at how long it takes customers to decide on a purchase and how they interact with displays in the store.
- Using cookies or web trackers to see users’ web views and visits
- The observer is unseen so customers behave in natural way
- Time consuming and does not provide qualitative evidence explaining consumers’ behaviour
Methods of Secondsry Research
Market Intelligence Analysis Reports
Academic Journals
Government Publications
Media Articles
The Internet
Internal Company Records
Market Intelligence Analysis Reports
Extremely detailed reports on individual markets and industries produced by specialist market research agencies. Sold directly to businesses in the market being researched.
Academic Journals
Academic research conducted by universities that may offer insight into new production methods or new approaches to market research. Subscriptions are required to access.
Government Publications
Quantitative and qualitative data published by the government such as population census, living costs, social trends. Free to access but not produced yearly.
Media Articles
Journalism broadcasts on a range of topics that may provide insights into the market and highlight current trends.
Ethical considerations of Market Research
- Researchers should have the permission of the people who they will be studying to conduct research
- Data collection should not cause physical or emotional harm to individuals
- There shouldn’t be personal bias
- Respondents should be aware wether the responses will be kept anonymus
Methods of Sampling
Random Sampling
Quota Sampling
Stratified Sampling
Cluster Sampling
Snowball Sampling
Convenience Sampling
Random Sampling
The sample is selected at random. Every member of the target population has an equal chance of being selected. Need:
- A list of all the people in target population
- Sequential numbers given to each member of this population
- A list of random numbers generated by computer
Random Sampling Advantages
- No bias involved in selection
- Sample will be representative of the population
Rameon Sampling Disadvantages
The individuals selected must be interviewed, if one doesn’t answer, another list needs to be generated and new participants have to be interviewed.
Quota Sampling
Involves the population being segmented into mutually exclusive subgroups which share specific characteristics (gender, age, income, marital status). It is the researcher’s job to find and interview the people who fit the categories required.
Quota Sampling Benefit
- Provides a more targeted method of sampling
- Is cheaper than random sampling
- Good for obtaining the views of a particular market segment
Quota Sampling Disadvantages
May be time consuming to find interviewees who represent each market segment.
Stratified Sampling
Draws a sample from a specified segment of the population and uses random sampling to select an appropriate number for each stratum.
Stratified Sampling Benefits
Makes the sample more representative of the population.
Stratified Sampling Disadvantages
Requires more administration, effort and time to carry out.
Cluster Sampling
Using one or a number of specific groups to draw samples from and not selecting from the whole population. E.g. using one town or region.
✅ Helps reduce costs
❌ It may not be fully representative of the whole population
Snowball Sampling
Using existing members of a sample study group to recruit further participants through their acquaintances.
✅ It is cheap and can be operated through social networks
❌ It is likely to lead to a biased sample
Convenience Sampling
Drawing a representative selection of people because of the ease of their volunteering or selection people because of their availability or easy access.
✅ Availability and quickness of which data can be gathered
❌ Is unlikely to represent the population as a whole and is likely to be biased
Problems with Market Research
Sampling Bias
Human Behavious: opinions change
Interviewer Bias
Sampling Bias
Results from a small group may turn out to be completely different from the reactions of the wider population.
Interviewer Bias
The interviewer may have lead the interviewee into saying what they think the interviewer wants them to say.
