Chapter 51- Identifying customer needs: Market research Flashcards
1
Q
What do most businesses want to ensure?
A
- That they are well informed on what is happening in the market for their particular products or services
- They want to know about anything that may affect their particular markets (both at present time and future)
- In order to achieve this, market research is essential
2
Q
What is market research?
A
- The process of gathering, analysing and interpreting information about a market
- It helps businesses understand consumer needs, preferences and behaviours to make informed decisions about products, pricing and marketing strategies
(It explores how best to satisfy that need)
3
Q
What is the purpose of market research?
A
- Achieve an increased understanding of the subject matter
- Knowing the market may help a business keep in touch with market trends and therefore avoid being left behind by competitors
4
Q
Market research is undertaken in order to:
A
- Describe the market
- Explain the market
- Predict changes in the market
- Investigate the reaction of consumers in the future
5
Q
Describing the market
A
- Business must be able to identify the customers or consumers
- This info can be used to ensure that customers are targeted in an appropriate manner
- e.g. the market is for young female clothes- advertising can be positioned carefully in order to reach the target market
- Identifying trends within the market is vital
- Market also refers to the actual market share and information about this can help a business decide what it ought to do next as business can attempt to increase/decrease it’s market share
6
Q
Explaining the market
A
- Business must understand why changes in the market have taken place and why one particular business has increased/ decreased it’s market share
- Also important to identify the reasons for the success/failure of a change in the marketing strategy of a business
7
Q
What does market research make it possible to find out?
A
- Why consumers prefer to purchase one brand as opposed to another
8
Q
Predicting the market
A
- Knowing how consumers will react to changes in the prices of products provides a valuable insight which can then be exploited
- e.g. research could be used to highlight the consequences of introducing a new model and the effect of reducing prices and if it encourages customer loyalty for the future
- Being aware of changes in lifestyles is also important
9
Q
Market research process
A
- To conduct market research, businesses may decide to undertake the project themselves or choose to hire a market research agency or consultancy
- Regardless of which approach is taken, it’s crucial to list what the business needs to find out before undertaking any research project
- Once the objectives of the research has been established, the researchers can use many types of research techniques to find the required info
- Research collected will either be qualitative or quantitative
- Which type of info is used depends on the research objectives
- It’s generally accepted that results are most useful when the two methods are combined
10
Q
Quantitative research
A
- Regarded as being objective as it involves the collection of facts
- It concentrates on what consumers actually purchase or use
- It concentrates on numerical data
- It requires significant attention to the measurement of market trends and often involves statistical analysis
- Main rule with quantitative research is that every respondent is asked the same series of questions
- Approach is very structured and normally involves large numbers of interviews, questionnaires or simply looking at records
- It is often used initially to establish the trends within a particular market
- quantitive research will be seen as secondary research
- under taking quantitive research can help the business to decide whether it is worthwhile continuing with a more detailed level of research which may involve qualitative research
- market research surveys are a popular method of collecting quantitive data
- these quantitive surveys can be conducted face-to-face, by using post, telephone, email or the Internet, or using past records and journals
11
Q
Qualitative research
A
- regards it is being objective because opinions are sought
- it provides an understanding of how or why things are as they are
- Example- a market researcher may stop a consumer who has purchased a particular type of bread and ask him or her why that type of bread was chosen
- no fixed set of questions but instead a topic guide is used to explore various issues in more depth
- discussion between interviewer and respondent is determined by the respondents thoughts and feelings
- research of this sort is mostly conducted face-to-face
- One of the best known techniques is focus groups
12
Q
Focus groups
A
- usually made up of 6 to 8 targeted respondents; a research moderator whose role is to ask the required questions, draw out answers, and encourage discussion
13
Q
Primary research
A
- qualitative research often involves primary research
- it concentrates on the opinions of consumers
- starts to establish why products are bought
14
Q
Secondary research
A
- Quantitative research often involves secondary research
- it would inform a business about the numbers within a market for a product
15
Q
Conducting the research- primary (field research)
A
- can be carried out in a number of ways
- e.g. interviews, questionnaires, observation, consumer panels and focus groups.
- marketing plans will consider the most appropriate way in which to collect the information required
16
Q
What factors depend on deciding which method to use for primary field research?
A
- cost and budget constraints
- Marketing objectives
- Information required
- Information already available
- Number of persons to be questioned
- Location of respondents
17
Q
Interviews
A
- they allow for a great amount of details to be extracted from the consumer
- Opinions can be clarified immediately
- but it is time-consuming so therefore a expensive method of research
- interviewers need to be well trained to ensure that questions are asked without bias and that the responses are recorded appropriately
18
Q
Surveys/questionnaires
A
- The most widely used method of collecting research material is the questionnaire
- Quick and economical method of gaining the opinions of consumers and potential consumers
- The more replies gained the more reliable is the information
- effective questionnaires are brief (ensures potential respondents aren’t put of answering duty amount of time that will be taken to complete them)
19
Q
Observation
A
- Watching consumers and users of products can offer a good insight for the researchers
- Observation is a viable alternative
- Example- when testing how young children play with particular toys it’s not always possible to ask them so therefore observation provides the necessary information
20
Q
Consumer panels
A
- testing products is often done by the use of consumer panels
21
Q
Focus groups
A
- consist of about 8 to 10 people who are offered various stimuli and their responses gauged and recorded.
- Sometimes monadic rating is used ( respondent is asked to rate a product on a scale but without comparisons to another product)
22
Q
Trial marketing
A
- System of ‘testing the water’ before
going ahead with a full launch of a product - Businesses may trial their product in a retail outlet like a supermarket or they might try to find a representative group of consumers
- The most effective area to use trial marketing is in the digital sector
- The trial can be done at almost 0 cost over the Internet and results can be fed back instantly
23
Q
Secondary (desk research)
A
- Data that already exists
- two main sources: internal and external sources
24
Q
Internal sources include:
A
- Sales data/figures- assuming that the information recorded is accurate trends can be established to help in the decision-making process for future marketing and production schedules
- Previous survey results- they can be used as a basis for comparison. The reliability of such data is questionable. It will depend on the nature of the product and its market. Some goods that change rapidly in terms of technology data for sales of an old model may not be very useful
- Customer information- (often collected from loyalty card details) knowing who buys what when and where can be invaluable data. Knowing the details of its consumers allows a business to be more effective and its marketing spend
- Company reports- business may have undertaken its own marketing reports and summaries of past performances. This information is useful.
25
Q
External sources include:
A
- Market research companies- collection and collation of secondary data maybe expensive but it can be good value for money
- Internet- Plays a larger role in providing secondary data. Market research businesses have their own websites and some reports are available online for a fee. Small firms can access information more cheaply than hiring a market research company to do the research for them
- Trade publications- reading trade publications (such as marketing the grocer) is a cheap method of keeping up today on any particular market. Information is available on the latest developments but also on competing businesses.
- Newspapers and magazines- Some newspapers particular features on certain sectors of the industry that may provide valuable secondary information. E.g. The times
- Competitors- possible to purchase competitors products and see exactly what is being offered.
- Government statistics and reports- government statistics are available in abundance and each government department has its own website and issues documents and statistics regularly
26
Q
What may influence the answers gain from respondents?
A
Being biased
27
Q
What must be considered when collecting the data?
A
The cost of collecting it
28
Q
What are the dilemmas facing those who collect the data?
A
- Time factor is crucial
- It may contradict the need to have up-to-date information
- Time spent collecting information may improve its reliability but information may quickly become out of date
