Chapter 18- Conducting Market Research Flashcards
How does an entrepreneur come up with ideas? (4)
Brainstorming, competitors, intrapreneurship and import substitution
Brainstorming
Involves writing down a list of new ideas, rejecting the ones that won’t work and following the ones that do
Competitors
Involves copying a product that already exists. Be careful of copyright and patents
Intrapreneurship
Involves employees inside a business coming up with a suggestion to improve the business
Import substitution
A product that is currently imported being made in Ireland
What is market research?
The gathering and analysis of information about consumer opinion to help a business make informed decisions
What is the aim of market research?
The ensure the business creates a product or service that customers need or want
What are the benefits of market research? (5)
- Understand the demand for the product (how many would buy?)
- Understand what the consumer likes/ dislikes about the product (feedback can inform changes)
- Understand the best price to charge (how much will consumers pay?)
- Gain new information about the competition (how to stand out?)
- Understand the best promotion methods to use (consumer reaction?)
What is a target market?
A group of people who all need or want a particular product/ service. It is who a product/ service is aimed at
EG The target market for computer games might be young males aged 8 - 18
What is desk research?
Involves looking at information that is already available. It is also called Secondary Research as the information has already been gathered for another purpose
Examples of desk research:
- Internet research (competitors websites)
- Central Statistics Office [CSO] (find population/gender/age of particular location)
- Sales reports (previous sales / what is popular)
- Newspapers (consumer trends EG healthy eating)
Advantages of desk research
Quick to collect as information is already available
Easy to collect as information is already available
Cheap (no need to hire someone to collect information)
Disadvantages of desk research
Information may not be relevant or useful to business
Information may be outdated or inaccurate
Information overload may occur (large volume of information available)
What is field research?
Involves going into the marketplace to gather information first-hand from your target market. Also called Primary Research as you are making direct contact with potential customers
Examples of field research:
- Surveys/ Questionnaires
- Observation
- Focus groups
- Survey/ Questionnaire
This involves questioning customers about the product or service. Questions should be clear and not lead the consumer.
Surveys can be completed online, telephone, face-to-face or postal
Types of survey questions:
Closed question: Yes/ No
Multiple choice question: consumer picks between options listed
Open ended question: consumer has option to say what they like
Advantages of surveys:
Consumers answer in their own time
Detailed information provided
Disadvantages of surveys:
Dishonest responses
Low response rate (especially online and telephone)
Survey tips:
- Brief (limit 10 questions)
- Realistic (avoid too many open ended questions)
- Persistent (send polite reminder email)
Observation:
This involves watching the consumer in action
EG the number of consumers picking a specific product at a particular time of day OR the time it takes to sell a product
Advantages of observation:
Large number of people can be observed
Cheap
Disadvantages of observation:
Time consuming
Limited information gained- for example, you know what product was chosen but not why
Focus group:
A group of consumers brought together to discuss a product or service
Advantages of focus groups
Large number of opinions collected
Disadvantages of focus groups:
One group member may dominate conversation
