Market Research

Learning Objectives Know and understand the purpose of market research and analyse the costs and benefits of market research to businesses Know the different methods of market research, give examples of appropriate research methods for given situations and discuss the advantages and disadvantages of the different methods

Market Research Market research is the process of gathering and interpreting data about customers and competitors within a firm’s target market.

Starter Activity - Find out what is the most popular flavour of ice cream of everyone in the room http://www.icecreamsurvey.com/ How is market research carried out? Why is market research needed? Why is there a need for sampling?

Purpose of Market Research Market research is carried out to: Help firms make marketing decisions Reduce risk Data may be gathered for different reasons e.g. to identify current and future needs of consumers, the price customers will pay for a product or the success of a promotional campaign.

Continued… Popular theory suggests that there are four reasons why market research might be carried out: Describe the market – explore trends, establish market share, find out who customers are. Explain the market – why market share has fallen, why customers prefer competitors products.

Continued… Predict changes – what customers will do if price rises, impact of increased competition. Explore future reactions – customer reaction to new ideas, find target price, establish most appropriate retail outlets.

Primary Research (Field) Primary research involves finding out new, first-hand information. This is called primary data. Methods of primary research include: Questionnaires Focus groups Observation Questionnaires may be face-to-face, telephone or written. Focus groups allow for more qualitative data to be collected and follow up questions can be posed to gain a greater understanding of opinions and feelings. ICT is increasing being used in market research. Data is gathered using online questionnaires and loyalty card schemes. Observation can be carried out using CCTV.

Methods of Primary Research Questionnaires – Survey asking a series of pre-set questions. Gathered via post, telephone or face to face Interviews – Focuses on a small number of individuals who are able to give detailed and precise information about their views and opinions

Continued… Observation – Observing customer behaviour and watching shoppers in action Test marketing – Trialling ideas and testing out products with a particular group YouTube - Product Testing Institute - Surfers

Continued… Focus group – Small number of people brought together to focus on a particular product You Tube - Dodge Commercial - Focus Group Consumer panels – consumers in a specific sector answer specific questions

Primary Research Benefits Drawbacks Directly relevant to the business Up-to-date data obtained Competitors do not have access to the findings Time consuming Often expensive Results may be misleading if the sample size is too small, questions are unclear or there is interviewer bias Bias may occur if questions are written or posed in a way that leads the respondent into answering in a particular way.

Secondary Research (Desk) Secondary research involves gathering existing information. This is called secondary data. Sources of secondary data include: Market research reports Trade journals Government statistics Sales and customer records Secondary Research is grouped according to internal and external

Methods of Secondary Research Internal data Sales Figures – Provides accurate results from previous time periods. Used to establish patterns of behaviour Annual Report and Accounts – Provides accurate results from specific years.

Continued… Customer data – Firms gather information about their customers e.g Loyalty cards, spending according to time and day Previous surveys – May be some relevant data. Company Intranet – Trends between stores in the same firm

Continued… External Data Government Statistics – Useful data about population change, local/national trends and industries Competitors – Accounts and sales brochures Trade publications – Specific to industries

Secondary Research Benefits Drawbacks Often quick and easy to collect A wide range of secondary data is available, especially on the internet Data may not be reliable or up-to-date May not be totally relevant May not be in a form that is easily interpreted and analysed

Quantitative Research Quantitative market research involves finding numerical data Quantitative data is generally collected from large samples and is easy to analyse Methods of collecting quantitative data include written and online questionnaires

Qualitative Research Qualitative research involves finding out opinions, attitudes and feelings Often more useful than quantitative data but is more difficult to collect and analyse Methods of collecting qualitative data include focus groups & in-depth interviews

Learning Objectives Know and understand the purpose of market research and analyse the costs and benefits of market research to businesses Know the different methods of market research, give examples of appropriate research methods for given situations and discuss the advantages and disadvantages of the different methods

Plenary Primary or Secondary market research??? Conducting a survey of every fifth person who passes you in the street Looking up information about people buying different types of insurance in a Mintel survey Asking your classmates 20 questions Copying out information from the Manchester Evening News Interviewing people through a telephone survey Sending questionnaire through the post Using the population census to find out about the people living in Bury