matket research Flashcards
what is market research
the process of gathering primary and secondary data on the buying habits, lifestyles, usage and attitudes of actual and potential customers.
what are the benefits of market research
Can identify opportunities and threats, i.e. changes.
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.
what are the drawbacks of market research
Research does not guarantee success.
It is costly in time.
Often all that is needed is good intuition or a hunch.
Costs money.
Research can be unreliable
why should extensive market research be carried out
An aid to decision making – helps to make informed decisions especially important in fast changing
markets.
To find out about customer wants and expectations.
To suggest introduction of new products, modification of existing products.
To find out how much customers are willing to pay/developing pricing strategies.
To gain competitive advantage/keep pace with competitors/find out what they are doing.
Predictive reasons – what is likely to happen in the
future.
Exploratory reasons – investigating new
possibilities in a market.
Descriptive reasons – what is happening in the market? Who is buying which products in our portfolio?
Explanatory reasons – for
example to find out why have sales fallen in the last six months.
Carrying out market research means that consumers may feel that their views are being considered.
Reduces risk – without market research a business may spend large sums of money developing and launching unsuccessful products.
why shouldnt extensive market research be carried out
Market research may predict that an idea/product will succeed but this is not always the case - primary research depends upon responses of consumers who may not respond in the same manner in the future.
Data can be based on an unrepresentative sample – sampling discrepancies caused by statistical
bias. A poorly constructed questionnaire can also lead to bias.
In secondary research, data does not always meet specific needs of a business.
Primary research can be expensive to gather and businesses may have to pay for secondary research.
Secondary data can be outdated – especially problematic in fast-changing industries.
Research data, especially primary can be time consuming to gather
what is primary research
(field research) – collecting primary data and information that does not already exist. It is collected for a specific purpose. Most primary information is gathered through
questionnaires, interviews, surveys, focus groups and consumer panels
what are the advantages of primary research
The research carried out is only available to that business – this will enable it to gain market advantages over rival firms.
It is up to date information, thereby enabling better decision making.
It can be targeted for specific needs that the business may have identified
what are the disadvantages of primary research
Can be very expensive to collect – could
the money have been better utilized using
secondary research.
Can be very time consuming to collect so
that by the time it has been collected and
analyzed the market may have changed.
Can have problems of bias.
what is secondary research
(desk research) – identifies, collects and collates 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
what are the advantages of secondary research
It is inexpensive to collect and quick to obtain.
Enables cost-effective analysis of several data
sources.
what are the disadvantages of secondary research
Often out of date.
Might not be available.
Little control over quality.
Problems of interpretation.
what is quantitate research
Involves the collection of data that can be measured. This means the collection of statistical data such as sales figures and market share. Surveys and the use of government publications/existing statistics are common methods of collecting quantitative research data.
Researcher uses tools, such as questionnaires
and surveys to collect numerical data.
Researcher knows clearly in advance what
they are looking for.
Recommended during latter phases of
research projects.
Is usually regarded to be less open to
interpretation than qualitative data
(objective).
Data is in the form of numbers and statistics
what is qualitive research
Involves collection of data about attitudes, beliefs and intentions. Focus groups, participant observation and interviews are common
methods used to collect qualitative data.
Researcher may only know roughly in
advance what they are looking for.
Recommended during earlier phases of
research projects.
Can be time consuming to collect and may be
difficult to draw general conclusions.
Information gathered is often open to high
degree of interpretation (subjective) and so
there is often disagreements within business about the significance and importance of
qualitative data.
Data is in the form of words, pictures or
objects.
what is 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.
what is quota sampling
the population is segmented into a number of groups that share specific characteristics.
The sample is often segmented on the basis of age or sex. This is known as the demographic profile.
Therefore, if it is known that 20% of your
buyers are men, interviewers would be
instructed to interview one man for every
four women in the sample.
This is a relatively cheap method of sampling compared to many others.
Results using quota sampling cannot be
regarded as statistically representative of the
population – they are not randomly chosen.
