Market Research

Marketing is perhaps the most important activity in a business because it has a direct effect on profitability and sales. Larger businesses will dedicate specific staff and departments for the purpose of marketing.

Why? A business might carry out marketing research to: Find data and information that help a business understand what customers want now or in the future. Find out whether current products are satisfying customers. Test new products by asking potential customers to try out the product. Assess the results of its promotional strategy – e.g. test the effectiveness of an advertising campaign. Understand the activities and strategies of competitors.

Market research terminology Primary Sources Market Testing Secondary Research Secondary Sources Questionnaire Loyalty Cards Survey Sample Population

Field Research Going out collecting information directly from the public through Surveys Where a sample of the public is questioned Observation Where peoples behaviour is recorded to see how they behave and act Consumer Panels People are brought together to sample and discuss a product Testing Where a new product is tried out to see how well it sells

Survey Samples Random – Chosen by chance, ie every 10th person Quota – should produce a representation of the group being surveyed ie 50% boys 50% girls Target – specify which group you would like to survey

Market Research Primary Research e.g. Secondary Research Advantages Disadvantages

Advantages Up to date. Specific to the purpose – asks the questions the business wants answers to. Collects data which no other business will have access to (the results are confidential). In the case of online surveys and telephone interviews, the data can be obtained quite quickly

Disadvantages Can be difficult to collect and/or take a long time to collect. Is expensive to collect. May provide mis-leading results if the sample is not large enough or chosen with care; or if the questionnaire questions are not worded properly.