4.4 - Market Research Flashcards
Why and how organizations carry out market research (AO3) :
Define the term “Market Research” and state its different examples and what they are used for.
Explain WHY market research is used. Give 4 examples of this.
Mention the two different methods of market research and describe how they are different from each other.
Market research refers to marketing activities designed to discover the opinions, beliefs, and preferences of potential and existing customers. It consists of primary and secondary market research, used to help identify and anticipate the needs and wants of customers.
WHY: To get a better understanding of its customers, competitors, and markets. For instance
1. To discover patterns in customer purchasing behavior
2. Gauge customers’ reactions to price changes
3. Learn about new market trends
4. Gather information regarding customer tastes and preferences, such as product design
Extra Information: There another two types of market research; ad-hoc market research and continuous market research.
- Ad hoc: conducted when required for a specific problem that the organization is facing. It is one-off
- Continuous: done on a regular and ongoing basis
Define the term “Primary Market Research”:
For the following methods/techniques of primary market research, define it and mention two ADVANTAGES and DISADVANTAGES:
1. Surveys
- Interviews
- Focus groups
- Observations
Primary market research (or field research) is the gathering of first-hand, new data (information does not currently exist) that is custom-made to an organization’s specific needs/purpose, using methods
such as surveys, interviews, focus groups, and observations.
- Survey: a document that contains a series of standardized questions used to collect data (opinions and feedback) for a specific purpose. The most common method of primary research.
(Standardised questions ensure that surveys are more reliable and so that the results can be generalized to represent the larger population.)
ADVANTAGES:
1. Enable researchers to gather a large amount of data relatively quickly
2. relatively cheap to collect data over a short period of time (not time-consuming compared to other methods).
DISADVANTAGES:
1. Selection or interviewer bias and/or poorly worded questions, thus generating unrepresentative results
2. Even with well-designed surveys and questions, participants may not be entirely truthful due to strategic reasons.
INTERVIEWS
Define it and mention two ADVANTAGES and DISADVANTAGES
- Interview: discussion/dialogue between an interviewer and interviewees to investigate their personal circumstances, preferences, and opinions through a set of questions, more detailed than a survey.
ADVANTAGES:
1. Specifically designed to meet the needs of the individual organization.
2. Clarification of questions or responses can take place as the researcher can ask follow-up questions
DISADVANTAGES:
1. Only a small number of respondents are involved, the findings might not be representative of the opinions of the market.
2. Interviews can be very time-consuming and are therefore a costly method of market research.
FOCUS GROUPS:
Define it and mention two ADVANTAGES and DISADVANTAGES
- Focus Groups: small discussion groups of targeted customers with similar characteristics are made to gain insight into the attitudes and behavior of respondents.
ADVANTAGES:
1. Help the business to identify the desires and preferences of different segments of the market. This helps the organization to improve its marketing mix
2. Enable market researchers to gather the opinions and attitudes of customers
DISADVANTAGES:
1. can be time-consuming and expensive, as the participants of a focus group are usually paid for their time.
2. Peer pressure and courtesy may force participants to give more polite or somewhat unreliable answers
OBSERVATIONS
Define it and mention two ADVANTAGES and DISADVANTAGES
- Observations: researchers watching, monitoring, and recording how people behave/react or respond in different situations.
ADVANTAGES:
1. not reliant on the willingness of people to participate in market research, unlike surveys and interviews
2. Results are likely to be accurate, realistic, and representative as behaviours are monitored. (more objective, bias is largely removed)
DISADVANTAGES:
1. Time-consuming, and interpretation of the findings can be highly labor-intensive
2. Research subjects may act differently if they know they are being monitored.
State two ADVANTAGES and DISADVANTAGES of primary market research in general
ADVANTAGES:
1. It provides up-to-date research data and information,
2. It is more relevant to the research needs of individual businesses (specifically to meet the requirements of the organization.)
3. Data collection and findings are unique and exclusively held by the firm (competitive advantage).
DISADVANTAGES:
1. Relatively costly compared to secondary research since someone has to collect new data.
2. Time-consuming to collect and analyze the results.
3. Extremely dull, repetitive, and tiresome for market researchers to conduct primary market research.
Define the term “Secondary Market Research”:
The following methods/techniques of secondary market research define it and mention two ADVANTAGES and DISADVANTAGES:
- Market analyses
- Academic journals
- Government Publications
- Media Articles
- Online Content
Secondary Market Research: also known as desk research, is the collection of second-hand data and information that already exists, previously gathered by others, such as media articles and government publications.
- Market Analyses : report containing data and information about a particular product, market or industry such as market size, share, and growth rate. Examples of such sources include: Business Insider, Statista
ADVANTAGES:
1. cheaper, and less time-consuming to gather, than primary market research as an alternative.
2. The information has already been gathered and is available.
DISADVANTAGES:
1. becomes dated rather quickly, unless the source provides regular updates.
2. The data is not exclusive to any organization; rivals can also purchase these reports.
ACADEMIC JOURNALS
Define it and mention two ADVANTAGES and DISADVANTAGES.
Academic journals: also known as scholarly journals, are publications that contain the latest educational research and academic theory, written by leading academics.
ADVANTAGES:
1. the most up-to-date research in an academic discipline.
2. likely to be reliable as it has been produced by scholars with the feedback and assessment of peers.
DISADVANTAGES:
1. Not always relevant to businesses, and the contents or findings are often contested.
2. Academic establishments tend to only allow paying subscribers to access academic journals.
GOVERNMENT PUBLICATIONS
Define it and mention two ADVANTAGES and DISADVANTAGES.
Government Publications: official documents and publications released by governments and government agencies with no standardized format.
ADVANTAGES:
1. Usually comprehensive, reliable, and up-to-date.
2. Large volume of government publications, covering a wide range of topics
DISADVANTAGES:
1. Due to the vast amount of information available, identifying and locating government publications can be difficult.
2.Not all data and information are readily available or are only obtainable for a fee.
MEDIA ARTICLES
Define it and mention two ADVANTAGES and DISADVANTAGES.
Media Articles: documents (articles) in print or online media. They are written by skilled journalists and authors and provide a very vast range of information.
ADVANTAGES:
1. Don’t require users to take out a subscription in order to access their websites where you find M.A.
2. readily available to users, 24 hours a day, every day. With advances in technology, more people have access to the websites and apps of the larger newspapers.
DISADVANTAGES:
1. potential bias from the journalists and authors.
2. Articles can become out of date (and hence irrelevant) quite quickly.
ONLINE CONTENT
Define it and mention two ADVANTAGES and DISADVANTAGES.
Online Content: the gathering of data and information from the Internet, such as company websites on the world wide web.
ADVANTAGES:
1. generally available quickly and at relatively low cost. A lot of online content is readily available free of charge.
2. Large and broad range of data and information
DISADVANTAGES:
1. As there is so much information available on the Internet, it can be challenging to find the best sources with accurate and up-to-date data and information.
2. anyone can publish information online - information can be inaccurate or biased and outdated unless updated regularly.
State two ADVANTAGES and DISADVANTAGES of secondary market research in general
ADVANTAGES:
1. Relatively quick to collect as someone else has gathered the information.
2. Relatively cheap to collect the information, especially from sources that are free
3. With digital technologies, it has become easier for researchers to access data and information online.
DISADVANTAGES:
1. not uniquely available to the researcher, so rivals also have access.
2. can become outdated very quickly.
3. already collected by someone else so has to be filtered to meet a firm’s individual needs.
The difference between qualitative and quantitative research.
Define the terms:
1. Qualitative Research
2. Quantitative Research
Qualitative Research: (category of market) research getting non-numerical responses from research participants in order to understand their behavior, attitudes, and opinions. (overall preferences)
Quantitative Research: a category of market research based on gathering numerical data and figures, i.e. quantifiable data. Enables researchers to determine trends, correlations and patterns
Define the term ‘Sampling’:
The following methods of sampling, define it and mention two ADVANTAGES and DISADVANTAGES:
- Quota
-Random
-Convenience
Sampling is a primary research technique that selects a sample of the population from a particular market for research purposes.
Quota Sampling: using a certain number of people (known as the quota) from different market segments and then grouping them together (subgroups) according to various characteristics. Examples of such sub-groups could include age, gender, and ethnicity.
ADVANTAGES:
1. The researcher has control over who is included in the sample
2. enables researchers to gather representative data from sub-groups.
DISADVANTAGES:
1. Researchers need time to determine the characteristics on which they will base the quota sample.
2. Selection is not random, so can be subject to researcher bias and sampling errors.
RANDOM SAMPLING
Define it and mention two ADVANTAGES and DISADVANTAGES.
Random Sampling: gives everyone in the population an equal chance of being selected for the sample. It is based on an arbitrary and/or systematic method, allowing all respondents the same equal chance of being selected.
ADVANTAGES:
1. Free from researcher bias and sampling errors,so are more likely to be representative/accurate.
2.quick and simple method of sampling, particularly if research participants are freely available
DISADVANTAGES:
1. Only tends to work well if members of a population are likely to have similar views or characteristics.
2. Needs to be large enough to generate results consistent with the opinions and views of the target population, but this can be time consuming and costly to implement.
