3.2.1 The role of Market Research and Methods Used:
Central Question Will quality market research guarantee success?
Learning Outcomes To understand what a market-oriented business is and how it uses market research To understand what Primary research and Secondary research is – the methods that can be used and the benefits and limitations of each To understand the following methods of primary market research – postal questionnaire, online survey, interviews, focus groups, the need for sampling To be aware of the factors influencing the accuracy of market research data.
Market Research This is how businesses collect information about their market or consumers What type of information might business want to find out?
Some reasons for Market Research Whether customers will buy the product How often customers will buy the product The price that customers are willing to pay The type of customers interested in the product Where the product should be sold These are known as Market Oriented businesses
Methods of Market Research Primary research (Field ) - NEW or firsthand data: - Questionnaires - Surveys - Consumer panels - Testing and observing - Focus groups Secondary research (Desk) – OLD data that has already been collected: - Newspapers, Government statistics, research companies, National and International government agencies -
Task – 5 minutes In Groups you will be assigned one method of Market Research to investigate and then feedback. You need to: - Research the Advantages and Disadvantages of using this method - Consider possibility of bias and accuracy - Can you give ‘real life’ examples of companies that you have used this method and why they used it. - Was this the most suitable method do you think?
Methods PrimarySecondary Postal / Online Questionnaire Government statistics Online SurveyNewspapers and News stations Focus GroupNon Governmental Organisations (NGO’s) e.g. WHO, UN, UNICEF. InterviewsCompany reports
What is Bias and what is its relevance to Market Research?
Random sampling – Collecting data from ‘random’ people – Can lead to unrepresentative sample Quota sampling – Dividing the population in to segments before taking the appropriate sample from each section – could be done by age, gender, income Sampling
Watch the Video and consider the folllowing questions: 1.What is sampling? 2.What is Random sampling? 3.What is Cluster sampling? 4.Which method is best? 5.How can you minimise bias? 6.What could happen if you do not plan your market research correctly? Video
Types of Data / Information Quantitative – based on numbers – 56% of 18 year olds drink alcohol at least four times a week - doesn’t tell you why, when or how Qualitative – more detail – tells you why, when and how!
Qualitative or Quantitative Answers? 1.Gender? 2.Age? 3.Three words that describe you? 4.Favorite Color? 5.How many times per week….? 6.Why do you choose Starbucks? 7.How much do you spend per week? 8.Your feelings on abortion? 9.Do you agree with abortion? 10. Rank your top 3 choices? …… Say Why?
What is the value of each type of data? What is the right balance?
External Sources Government Statistics (ONS) EU - Euro Stat Trade publications Commercial Data - Gallup, Mintel, etc. Household Expenditure Survey Magazine surveys Other firms’ research Research documents – publications, journals, etc.
Designing a questionnaire A successful questionnaire will: Have simple, clear questions that link directly with the information needed Not ask too many questions Ask the questions in a common sense order Record the data quickly and conveniently
Types of Questions Closed question – this is where the person answering chooses from pre-set answers, often by ticking a box. Open questions – this is where people can answer them in their own words and give their own opinions, but it is much more difficult and time- consuming to analyse this sort of reply.
Questionnaires Careful design required: Not too long Clear and concise questions Avoid open-ended questions Unbiased – no leading questions Incentive to complete Logical Order
FINALLY……… CONSIDER: HOW MANY PEOPLE TO ASK DAY AND TIME OF DAY LOCATION TO ASK PEOPLE – one or several?
Analysis and Evaluation of Findings from Questionnaires Once a survey has been completed the data collected can be presented in the following forms: – Tables – Charts – Graphs