Market Research Flashcards
Two types of market research
Primary and secondary
What’s primary market research
Where a business gathers new data
What’s secondary market research
Involves using data that’s available
Ways of collecting primary market research
1) Questionnaires, observations, interviews, focus groups
2) test marketing- which is where a business launches a product in a region and measure sales and response before launching to whole country
3) sampling
Benefits of primary market research
- Primary data is needed to find out consumers opinions on a new product or advert
- Primary data is specific to purpose it’s needed for
- Its exclusive to the business who researched it, competitors cannot benefit from it
Drawbacks of primary market research
- It is labour-intensive
- Expensive
- Slow
Ways of collecting secondary market research
- Government publications
- Internet sources
- Trade magazines
- Market reports
Benefits of Secondary market research
- Easier
- Faster
- Cheaper than primary market research
Drawbacks of secondary market research
- May be unsuitable
- May have errors or out of date
Why might secondary research be used
To get an initial understanding of a market.
Firm may then carry out specific primary research to investigate problems in the secondary research
Why are samples of people used rather than whole market
Keeps costs down and saves time and resources
What makes a sample representative
Having similar proportions of people in terms of age, gender, income etc.
Why’s a representative sample important
More likely to give accurate results
A big or a small sample is better
Bigger sample as it’s more likely it’ll be representative, however a big sample won’t necessarily be 100% accurate. There’ll always be a margin of error
What does the size of the sample depend on
How will this affect the sample
- How many people a firm can afford to ask.
- Money is limited, risk of results being inaccurate increases
Would a new business launching a new product in a niche market prioritise accuracy or cost
- A new business launching a new product in a niche market is risky. It will benefit from accurate research to find out what consumers really want.
- So may prioritise accuracy over cost
Would a business launching a product in a competitive market prioritise accuracy or cost
- Products in a competitive market are similar, therefore is likely to prioritise cost over accuracy.
- It might not need to spend much on market research as it’s already clear that the product is in demand
How else do researchers increase accuracy other than a representative sample
Avoiding bias
What should questionnaires, surveys and interviews avoid
Biased questions
How can interviewer bias be caused during an interview
By the personality of the interviewer, their opinions can influence the interviewee
How can respondent bias be caused during an interview
- Respondents can give biased answers, which is when the response isn’t the true answer, often because they don’t think their true answers are socially acceptable
How’s technology useful to support market research
- Makes market research easier, cheaper and quicker
- Can be used to get a lot more information than traditional research methods
- Easier to reach a wider sample
Three examples of ICT that firms can use for market research
- Websites
- Social networking
- Databases
How can businesses use websites for market research
Using the website to conduct short surveys or by analysing the activities of people using the site
E.g. what times of day/year the website is used most
What visitors are clicking on most
How likely they’re to spend money
State a limitation of using websites for market research
Business might discover many people visiting its site don’t end up buying products, but won’t know why
How else can businesses carry out market research, instead of looking at their own
- Looking at competitor websites to gather info on their new products, prices etc.
Another way carrying out market research from their website
A Business can read their reviews about products.
However consumers are more likely to write a review on bad experiences rather than good therefore may not be representative
What is social networking
Use of internet-based platforms to make connections with people
E.g. Facebook, Twitter
How can you carry out market research through social networking
Firms can post content and monitor responses, may find out about people’s opinions on their products and competitors products
This is cheap and quick
How else is social networking good for consumer preferences
Social networks can track trends
Limitation of social networks
Not all consumers use the same social networks. Therefore market research could produce different results
E.g. fewer older people use Twitter and Facebook
Why are business databases useful
They collect their own data about their products and consumers
E.g. supermarkets offer loyalty cards, allowing supermarkets to firm a database of customer names and addresses, and also their preferences based on what they buy
How can you use databases as a source of secondary research
Firms can use other databases , which can be accessed online for a fee.
- Provides info about trends, businesses and consumers in a particular market.
Benefit and limitation of using databases as secondary research
- Benefit= Theyre quick and cheap source of information
- Drawbacks= Data is mostly quantitative, therefore doesn’t give much info on consumer opinions about the product
What is market segmentation
Dividing a market into groups of buyers
Consumers in each segment share one or more characteristic. E.g. age, income, hobbies etc
How does market research help segment a market
It reveals more about the types of consumers in the market
Why’s market segmentation help
Each segment of consumers has different wants and needs, so requires a different marketing mix.
Segmenting a market allows businesses to target their marketing towards specific groups of buyers
How can market segmentation help produce new products
Identifies segments of a market who’s needs and wants aren’t being met
4 ways to segment a market
Demographic segments
Geographic segments
Income segments
Behavioural segments
Give examples of demographic segments
- Age, E.g. Saga holidays aimed at over 50’s
- Gender, E.g. Yoghurts mainly marketed towards women
- Socio-economic class, E.g. modern, one bedroom flats marketed at young professionals
Give examples of geographic segments
Market divided into neighbourhood, city, county, country
E.g. Asia, method mostly used by multinational companies as customers have range of cultures and need different marketing mixes
Give examples of income segments
Chanel makeup aimed at high income customers
Superdrug’s makeup aimed at lower income customers
Give examples of behavioural segments
- Amount of use, E.g. phone suppliers market differently to heavy users and light users
- Lifestyle, E.g. busy, young workers may use lots of microwave meals
- Hobbies and interests, E.g. High protein snacks may be marketed towards athletes
