1. Market research (1) Lesson aims: To know the purposes of market research To explain the methods, advantages and disadvantages of primary and secondary market research

2. Starter (4 minutes): 1. Define ‘primary research’ 2. Give ways of finding it out 3. Define ‘secondary research’ 4. Give places to find it

3. Recap: What is the difference between sales value and sales volume? What is market growth? What are the factors that influence market growth? What is market share?

4. Market Research (Start-up) Market research is needed for new start-up businesses, as they need an understanding of their market before they operate in it. They can use the information and data as part of their planning process and to provide the best possible goods and services based on consumer wants and needs.

5. Purposes of Market research Descriptive reasons – finding pieces of information, such as identifying trends, whether objectives are met and competitor analysis. Explanatory reasons – Finding out why things have happened, e.g. why a product is unsuccessful. Predictive reasons – Using information to forecast, for example sales. Exploratory reasons – Researching probable consumer reactions, such as the predicted level of demand.

6. Primary research New information the company finds for itself. Methods include: Surveys/questionnaires – Street, telephone, mail, internet. Interviews. Experiments. Focus groups/consumer panels. Observation. Loyalty cards. Test marketing – Local area/pilot. Businesses often perform primary research after secondary research; much data can be found already and it is cheaper than primary research. You are required to read up on the advantages and disadvantages of each method, making sure you can name all of them.

7. Advantages/disadvantages of primary research. Can get more specific information for your company/activity. Asking actual consumers targeted, which are more appropriate. You can gather information as you get it. Can ask complex questions with qualitative reasoning, such as feelings and opinions. Can be more expensive than secondary; costly for new firms. Rejection by some respondents/not taken seriously. May not answer truthfully/emotional/perso nal questions. Interviewer bias – can ask leading questions; as well as being subjective.

8. Secondary research Using information that already exists. Often performed first. Books/magazines/newspapers. The internet. Trade/academic journals. Market research organisations. Firm’s own information, e.g. profit and loss accounts, reports, etc. Government publications. Official data, e.g. census. Other companies’ records and information.

9. Advantages/disadvantages of secondary research. Cheaper than Primary research, often free. Can get a large amount of detailed statistics and trends. There are many sources of data and information potentially, many are easy to access. Objective – No bias. Collected for other purposes than yours, and therefore difficult to find exactly what you need. Could be inaccurate or incomplete, may be out of date. May be in a difficult to analyse format. Your competitors can also get the same data, so you may not gain a competitive advantage.

10. Homework/now… Homework: Reading – Chapter 5 Homework – Revise for mini mock test – Next Friday. Now: Practice exercise, p.54 – Q.1-6.

11. So… What are the four purposes market research? What is primary research? Examples? Advantages? Disadvantages? What is secondary research? Examples? Advantages? Disadvantages?