Market Research Flashcards
What is market research
The process of gathering primary and secondary data on the buying habits of actual and potential customers
Benefits to market research
- Can identify opportunities and threats
- Can be used to monitor sales after a promotional campaign
- Can help them find alternative routes to overcome a problem
- Identify target market
- Reduce risk of failure
Drawbacks to market research
- Research doesn’t guarantee success
- It is costly in time
- Costs money
- Research can be unreliable
Why carry out market research?
- An aid in decision making
- Find out about customer wants and expectations
- To gain an advantage / keep pace with competitors
- To suggest introduction of new products / modify
- Reduces risk of launching unsuccessful products
Reasons against carrying out market research
- Market research may predict an idea/product will succeed but this is not always the case
- Primary research can be expensive
- Secondary data can be outdated
- Researching data can be time consuming
- Secondary data is not always specific to needs of the business
Primary Research
Collecting data and information that doesn’t already exist. It is collected for a specific purpose.
Most primary data is gathered by surveys, interviews, questionnaires, focus groups.
Primary Research - Advantages
The research carried out is only available to that business - this will give them an advantage over competitors
It is up to date information
It can be targeted to the specific needs of the business
Primary Research - Disadvantages
Can be very expensive to collect
Can be very time consuming to collect and by the it is collect and analysed the market may have changed
Can have problems of bias
Secondary Research
Identifies and collects information that is already in existence. This can be collected internally or externally.
It may be existing business documents, official publications, yellow pages, industry magazines and online desk research.
Secondary Research - Advantages
It is not expensive and quick to obtain
Enables cost-effective analysis of several data sources
Secondary Research - Disadvantages
Often out of date
Might not be available
Little control of quality
May not be specific to business needs
Quantitative Research
Involves the collection of data that can be measured
Eg statistical data
Qualitative Research
Involves collection of data about attitudes, beliefs and intentions.
Eg interviews, focus groups
Sampling
A group of respondents to a market research exercise who are selected to be representative of the views of the target market as a whole
Sample size
The size of a sample used is very important as it needs to be large enough to make the data valid
- if the sample size is large, the research will take a long time and may be very expensive
- if the sample size is too small, then there is a greater chance that random factors will make results inaccurate
