1. Market Research
Unit 5 - slide 13

2. The Need for Market Research
Please refer to page 46 of your notes
Unit 5 - slide 13

3. Difference between Promotion and Research
Promotion is the communication between the business to the consumer.
Research is the communication from the consumer to the business.
Importance?
method used by business to anticipate the needs and wants of the customer.
Therefore deciding how profitable the business will be.
Unit 5 - slide 13

4. Included in research What type of consumers buy what product.
What consumers think of a product.
What prices they are are prepared to pay.
What competition and potential competition may exist.
Types of packaging and promotion which are appropriate.
Best channels of distribution and where to sell it.
Legal restrictions and regulations that apply to the product.
Unit 5 - slide 13

5. Types of Market Research
Primary Information also known as Field Research
Secondary Information also known Desk Research
Unit 5 - slide 13

6. Primary or Field Research - Revision
Information up-to-date.
Collected for exact purpose.
Not available to competition as the business itself has collected it.
Usually gathered through a survey.
Unit 5 - slide 13

7. Population
Too expensive and time consuming to carry out research on every consumer in the market – info would be out of date by the time you’ve collected it.
Population refers to all the persons or companies you would like to direct questions to.
More appropriate to take a sample of that population.
Sample should be representative of the population.
Unit 5 - slide 13

8. Sampling Three decisions required. Who is to be surveyed?
Population that you plan to target in your research.
Develop a sampling frame – ensures that everyone in the targeted population has a chance to be included.
How many people/companies should be surveyed?
The larger the sample, the more accurate your survey will be but it is expensive to carry out.
How do we choose those to be included in the survey?
Two main methods: Random sampling and Quota sampling.
Unit 5 - slide 13

9. Random Sampling
Producing a random list of individuals through the use of either a computer, telephone directory or electoral register.
Advantage: no chance of bias when selecting individuals (won’t be choosing a group with particular views).
Disadvantage: not focused on any particular market segment.
Unit 5 - slide 13

10. Quota Sampling Preferred method of research.
Selected proportion of the whole population by:
Social status
Gender
Age etc.
Advantage: cheaper to operate than random sampling as statistics are available showing the proportions of different groups.
Disadvantage: Less representative than random as you are only focusing on a certain group.
Unit 5 - slide 13

11. Gathering Information
Used once you have decided upon your sample.
Either done through Interview or Questionnaire.
Unit 5 - slide 13

12. Questionnaire
To gain information from the respondent on a wide variety of different issues.
Included:
What they own
what they would like to own
what they plan to buy
their values, attitudes and beliefs.
Unit 5 - slide 13

13. Design of Questionnaire
Must be designed in a way that the respondent wants to complete.
Purpose should be clear with an explanation of why they would benefit from completing it.
Should be easy to understand
Questions should not be based too much on person’s memory as the information may be guessed.
Unit 5 - slide 13

14. Vary questions asked to maintain interest.
Opening questions should be easy to get people started. More complex questions should be kept nearer the end.
The closing questions should identify the respondent by age, income etc.
Questions should follow a logical order – questions on same topic should be grouped together.
Use terms that mean the same to all people (often can mean once a day to some people but once a month to others)
Vary questions asked to maintain interest.
Test the questionnaire before use.
Unit 5 - slide 13

15. Interview Advantages Used when questions need to be more detailed.
Uses a trained interviewer.
Interviewer can explain complex questions, encourage answers and ask follow up questions
Allows for more detailed responses rather than one or two word responses.
Unit 5 - slide 13

16. Interviewing Disadvantages
Time-consuming
Expensive
Poor interviewers may influence the answers given.
Unit 5 - slide 13

17. Ways in which interviewing can take place.
Personal interviews
Face-to-face in the street
In an office
At home
Phone interviews
Providing the respondent is willing
Unit 5 - slide 13

18. Other Methods
Consumer Panel – small groups of consumers brought together to get their views on a number of new products.
Hall Test – larger number of consumers are asked to comment on a range of products.
E.g. major film releases are shown first to a test audience who will then discuss what they thought. Film makers may then decide to reshoot or change some scenes.
Unit 5 - slide 13

19. Secondary Data/Desk Research
Unit 5 - slide 13

20. Desk Research Cheaper and Easier to obtain.
Information is usually historic and collected for another purpose.
Available to competitors.
It may not be accurate
Unit 5 - slide 13

21. Methods
Loyalty cards contain information on the customer and shows what spending patterns they have.
Bar codes and electronic check-outs keeps track of what is being purchased in different parts of the country.
Internet.
Unit 5 - slide 13