4.4 Market research Flashcards
Product-based research
New products and prototypes may be tested on potential customers. This will allow companies to gain an understanding of customers’ reactions before a new product is released onto the market.
Price-based research
In highly competitive markets, new companies may be forced to use a price follower pricing strategy. If this is the case, companies must regularly research the market to find out the pricing strategies of competitors. Their own prices will then be adjusted to ensure that they are inline with the competition.
Promotion-based research
It is important for companies to understand which media their target market accesses. If a company selects the wrong media and customers do not see or react to the message then money has been wasted.
Place-based research
Selecting the right channel of distribution can be the difference between success and failure. A range of research methods may be used for this. Interviewing consumer experts or simply asking the target market themselves can provide valuable insights
Primary market research
Primary research is the creation of new information. Companies carry out primary market research when they need specific up-to-date information.
Methods of primary market research
Surveys
Interviews
Focus groups
Observations
Surveys
Surveys attempt to gain data from large numbers of respondents in a relatively short time frame. They are well suited for gathering quantitative rather than qualitative data. Surveys come in many forms; these include:
Online surveys, such as Google Forms, sent out by email, or website evaluations.
Surveys by phone, asking customers to rate the service they receive from a telephone call centre.
Face-to-face questionnaires, which may take place on high streets or shopping malls.
Benefits of Surveys
- Fast to design and implement.
- Large amounts of quantitative data can be gathered.
- They are cost-effective, especially online.
- The anonymity of some of the types of surveys brings about more truthful answers.
- With the development of survey software, statistical techniques can be used to analyse data and come to a conclusion. It can also determine validity, reliability, and statistical significance of the responses.
Limitations of Surveys
-Respondents may not take the research seriously, lowering the validity of the data.
-Limited use for qualitative research.
-The possibility of researcher bias.
-It is difficult to plan for all the various answers that participants might give. The questionnaire must give respondents plenty of opportunity to share their views, but are necessarily rigid.
Interviews
Personal interviews are a lengthier surveying method and allow researchers to gain large amounts of qualitative data.
Benefits of Interviews
-Large amounts of qualitative data can be gathered.
-Additional detailed information can be gathered using snowball sampling .
-Useful for gathering expert opinion.
Limitations of Interviews
-Takes a huge amount of time to arrange and analyse.
-Respondents may need to be paid to take part.
-The possibility of researcher bias.
-They are expensive.
Focus groups
A focus group is an interview conducted with a group of individuals, usually with similar characteristics.
Benefits of Focus groups
-Large amounts of qualitative data can be gathered.
-Conversation can flow freely, rather than being responses to fixed questions. More information might be gleaned this way.
-Individuals have the opportunity to ask questions.
-Researchers can seek clarification.
-Potential changes to the marketing mix can be pre-tested on members of the target market.
Limitations of Focus groups
-Takes a significant amount of time to arrange and analyse.
-Respondents may need to be paid to take part.
-Limited use for quantitative research.
-The possibility of researcher bias.
