3.2.1 U NDERSTANDING MARKETS AND CUSTOMERS – M ARKET RESEARCH AQA Business 3 D ECISION MAKING TO IMPROVE MARKETING PERFORMANCE How would you try to discover if there is a market for this product?

3.2.1 U NDERSTANDING MARKETS AND CUSTOMERS  In this topic you will learn about  The value of primary and secondary marketing research  The value of sampling

*M ARKETING RESEARCH  Market research is the collection and analysis of data and information to inform a business about its market  Primary market research (field research) involves the collection of first hand data that did not exist before and therefore it is original data  Secondary market research (desk research) is research that has already been undertaken by another organisation and therefore already exists  Advantages and disadvantages

P RIMARY MARKET RESEARCH  Examples of primary market research include:  Surveys and questionnaires  Postal  Telephone  Face–to-face  On-line  In depth interviews  Focus groups  Observations To what extent do you think focus groups are an effective method of primary research for all products and services?

S ECONDARY MARKET RESEARCH  Examples of secondary market research include:  National and Local Government e.g. Office for National Statistics  Market Research organisations e.g. MORI, MINTEL  Professional bodies e.g. ACCA  Trade unions and Confederation of British Industry (CBI)  International bodies e.g. EU, OECD  Academic organisations e.g. universities  Newspapers and magazines  The Internet

*Q UALITATIVE AND QUANTITATIVE DATA  Qualitative research is the gathering of non-statistical information that gives a company indepth insight into the reasons for human behaviour  Quantitative research is the gathering of statistical data to inform the company about people’s behaviour but does not identify the reasons To what extent do you think quantitative data is more useful than qualitative data in informing marketing decisions?

M ARKET MAPPING A market map is a diagrammatic technique that enables businesses to display the perceptions of customers Compares different variables regarding products and consumers It can be used to analyse consumer buying habits and preferences For example it may compare the price of a good with the quality of that good It can be used to identify what segment of the market is underprovided for and look at producing a product to fill that gap Typically, products are compared between all competitors within a market Gives a firm real insight into the competition within the same market as its own product

MARKET MAPPING High quality Low price Low quality High price o o o o o o o o oo o o o o o A market map for washing up liquid The market map shows that there are plenty of high quality, high priced products and plenty of low price, low quality products. Therefore, there might be a gap for: high quality, low price low quality, high price very high quality, high price very low quality, low price

B ENEFITS OF M ARKET MAPPING  Allows a business to position its product in the market  Identifies other competitors In the market  Opportunities within the market (Gap in the market)

MARKET MAPPING Expensive Slow Cheap Fast Where would you place the following cars? a.Ferrari b. Rolls Royce c. Mini d. Fiat 500 e. Formula 1 car

M ARKET MAP  Here is an example of a market map for the luxury car market

In pairs  Choose a product that you are familiar with e.g. confectionery, ice-cream, fashion, airlines, sports wear  Think of at least 3 possible sets of criteria you could use to categorise businesses within your chosen market  Produce a market map, similar to the luxury car one, based upon one of the sets of criteria for your chosen market  Are there any gaps in the market?  Use your market map to describe the market conditions

C ALCULATIONS 1.What was the size of the market by value in 2015? 2.What was the approximate size of the market by volume in 2015? 3.The market revenue is predicted to be 28.9 billion Yuan by What is the forecast market growth? 4.What is the market share of the market leader? 5.Describe the trend in the Chinese online video industry. 2015

LO: R ECAP UNDERSTANDING OF MARKET RESEARCH  To understand types of sampling methods  What is the difference between primary and secondary research?  What are the benefits of each?  What are the drawbacks of each?  What is Qualitative research?  Explain Quantitative research

F ORMULA TESTING  How did you do??

V ALUE OF SAMPLING Sampling allows business to gain insight into the wants and needs of the customer in a cost effective manner. Businesses cannot ask for the opinions of all potential customers and therefore try to choose a representative sample

TYPES OF SAMPLING TECHNIQUES 1. Random  a sample is selected for study from a population where each individual is chosen entirely by chance and has an equal chance of being selected 2. Quota  The population is first segmented into subgroups before a judgement is made in selecting respondents that are representative of that subgroup  e.g. within a sub group of women 60% may be aged 20-40, 20% and 20% 61+, the sample should represent this 3. Stratified  The population is first segmented into subgroups before respondents are randomly selected from within that subgroup  e.g. within a subgroup of year olds any member of the population has an equal chance of being selected

 The value of sampling will depend upon:  The sample technique used  How the sample was carried out  The size of the sample  The size of a sample will depend upon a number of factors including:  The budget available  The importance of accuracy  Degree of confidence in results

T EST YOURSELF End 1.Distinguish between primary and secondary research. 2.Distinguish between qualitative and quantitative data. 3.What is meant by the term market mapping? 4.State one benefit to a firm of market mapping. 5.What is meant by the term quota sampling? 6.State two other sampling techniques.

3.2.1 U NDERSTANDING MARKETS AND CUSTOMERS  In this topic you have learnt about  The value of primary and secondary marketing research  The value of sampling