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- May be out of date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.