Level 1 Business Studies AS90837 Demonstrate an understanding of internal factors of a small business

Methods of Market Research Students will describe the need and methods for market research: Define market research Understand why organisations conduct market research Describe market research methods of primary and secondary sources Describe types of market research such as surveys, interviews, focus groups and competitor analysis Explain the advantages and disadvantages of different types of research

Market Research What is it? A process of collecting, analysing and presenting information about a product or service.

Market Research try to find the answers to: What would they be willing to pay for the product Which features do they like / would like to see changed Would they buy the product, how many? How to promote the product Analysis of competition

Types of Information Quantitative Information: gives answers to questions of quantity. e.g. how many people would purchase product “A” in January Qualitative Information: gives answers to questions relating to opinions or judgement e.g. what do people like or dislike about product “A” Both types of information be gained via primary and secondary research

Primary Research Collecting and using original data Requires direct contact with customers (potential or existing) Primary research is usually planned and carried out by those who want to use the data Can be time consuming and expensive Used for a specific purpose, e.g. to test the demand for a new product

Primary Research Interviews: face-to-face, telephone, postal, groups Questionnaires: face-to-face, telephone, postal, groups Observation: watching and recording peoples behaviour Consumer Panels or focus groups Competitor Analysis: e.g. what do they charge for a similar product Experiments: e.g. testing tastes, preferences for food products

Primary Research Interviews: face-to-face, telephone, postal, groups Advantages: Questions can be explained to the interviewee Detailed information can be gathered Disadvantages: Interviewer can lead the interviewee which could influence the interviewees answers Expensive as can be very time consuming

Primary Research Consumer Panels Advantage: Can provide detailed feedback about consumer information Disadvantages: Time consuming Can be expensive Can be biased in influenced by other opinions

Primary Research Observation Advantage: Inexpensive method for gathering information Disadvantages: Gives simple basic facts Doesn’t explain reason for reactions to a product

Primary Research Experiments Advantages: Easy to set up Easy way to gather information Disadvantages: People might give inaccurate answers in order to not offend Sample may not represent potential customer base Many potential customers will not be included

Secondary Research Researching information that has already been gathered and collected and is available for others to use Information can be gathered from internal and external sources

Secondary Research Internal Sources of Information: a lot of information can be gathered from within a business, such as the sales department, e.g: Sales department – pricing information, sales records Opinions, public relations staff Finance department Customer service department

Secondary Research External Sources of Information: when information is gathered outside of the department Internet Trade unions Reports/ research Newspaper/journals Media reports Research agencies

Activities A new clothing store business is thinking of opening in Riccarton Mall. What kind of primary research would be the most suitable research method? Why?

A new ice cream business is looking to open in the Cashmere area. You have been commissioned to research if there is a market for the product. You have been asked to produce a list of questions comprising of 8-10 quantitative questions for the business.

An existing business is looking to launch a new version of their mobile phone. You have been asked to put together at least 5 qualitative questions to ask a focus group. The phone business is also needing some secondary research. Identify 2 internal areas and 2 external areas that they could gather secondary information from.