market research - p1

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define market research

Market research: systematic collection, analysis and interpretation of information about a market, including customers, competitors and the business environment.

what is the importance and drawbacks of market research

importance: reduce risk , understand customer needs and wants ,understand competitors , improve decision making

drawbacks: may be expensive, time-consuming or inaccurate.

define primary and secondary research and state their advantages and disadvantages

Primary research: involves collecting new/original data specifically for the business's current research objective.

Advantages: Information specifically designed for business, Can target a particular customer segment, relevant to the decision being made, Business controls how the research is conducted.

Disadvantages: expensive , time consuming , inaccurate, dishonest answers, poorly answered questions can be misleading

Secondary research: uses existing data that has already been collected, either by the business itself or by another organisation.

advantage: cheap, time saving, easy to read

disadvantage: outdated, unreliability/biased, competitors have same access to the info

define qualitive and quantitative data and their advantages and disadvantages

Quantitative data is numerical data that can be measured and analysed statistically.

Advantages: Easier to identify patterns and trends, Allows comparisons between groups, Results can be presented using graphs/charts.

disadvantages: doesn’t explain why customers behave in a particular way, Results depend heavily on how questions are designed., Numerical results can create a false impression of certainty.

Qualitative data: provides information about opinions, attitudes, feelings, motivations and reasons rather than simply numerical measurements.

Advantages: deeper insight into customer motivations, Can explain why customers behave in certain ways, Useful when developing/improving products.

disadvantage: Difficult to quantify and compare, Usually takes longer to analyse, Results may not be representative of the entire market.

what are methods of primary research and their strengths and weaknesses(theres 5)

Questionnaires/surveys : Strengths: collect large amounts of information, Relatively inexpensive, particularly online, Can reach geographically dispersed customers. Weaknesses: Low response rates, Questions may be misunderstood, Respondents may not answer honestly, Poorly designed questions can create bias.

Interviews: Strengths: Can obtain detailed responses, Interviewer can ask follow-up questions, Useful for exploring opinions. Weaknesses: Expensive and time-consuming, Interviewer may influence responses, Small numbers of respondents may reduce representativeness.

Focus groups: A small group of consumers discusses a product, service or idea under the guidance of a researcher. Strengths: Produces detailed qualitative information, Allows businesses to explore customer opinions and motivations, Useful for testing new products or advertising. Weaknesses: Small group may not represent the whole market, Dominant individuals can influence the discussion, Can be expensive to organise.

Observation: The business observes customer behaviour rather than directly asking customers questions. Strengths: Measures actual behaviour, rather than claimed behaviour, Can identify patterns customers may not consciously recognise. Weaknesses:

Does not explain why behaviour occurs, Customers may change their behaviour if they know they are being observed.

Test marketing: A product is launched on a small scale or in a limited geographical area before a full launch. Strengths: Provides evidence of actual customer behaviour, Can identify problems before a national/full launch, Reduces the risk of a major unsuccessful launch Weaknesses: Costs money, Competitors may see the product and respond., The test market may not accurately represent the wider market.

what are methods of secondary research and their strengths and weaknesses

Internal sources: Information already held by the business, such as: Sales records, Customer databases, Previous research, Customer complaints, Loyalty-card data

Advantages: Cheap, quick and directly relevant to the business.

Disadvantages: May be incomplete and only describes the business's existing customers.

External sources: information produced outside the business, such as: Government statistics, Market research reports, Newspapers, Competitors' websites, Industry associations

Advantages: Can provide large-scale market information and industry trends.

Disadvantages: May be outdated, expensive to access, biased or unsuitable for the business's precise research objective.

what is the most appropriate research model

There is no single best method. The appropriate method depends on the circumstances.

A business should consider:

Cost, Time, Purpose, Reliability, Representativeness, Size of sample, Type of information required, Target market, Nature of the decision

how do firms Interpret quantitative research and what should they consider

interpret what the figures mean.

Look for:

Trends

Percentages

Averages

Relationships

But it should consider:

• sample size

• representativeness

• how respondents were selected

• reliability of the data

• whether the difference is significant enough to influence the decision

how do firms Interpret qualitative research

Businesses analyse:

• recurring themes

• opinions

• attitudes

• motivations

• reasons

• positive/negative comments

• differences between customer groups

define sampling

A sample is a smaller group of people selected from a target population to take part in market research.

define random sampling and the advantage / disadvantage of it

Random sampling means members of the target population have an equal or known chance of being selected. advantages: Reduces researcher selection bias, Can produce a more representative sample, Relatively straightforward if a complete sampling frame exists. Disadvantages : Requires an accurate list of the population, Random selection can still produce an unrepresentative sample by chance, May be difficult/expensive to organise

what is quota sampling and their disadvantages and advantages

Quota sampling involves selecting respondents so that the sample contains particular proportions of different groups.

the researcher may set a quota to reflect this structure.

Quotas could be based on: Age, Gender, Income, Location, Other relevant characteristics

Advantages Can make the sample more representative of important customer characteristics, Ensures particular groups are included, Often quicker and cheaper than random sampling.

Disadvantages, Researcher may choose individuals within each quota- introducing selection bias, Requires knowledge of the characteristics of the target population, Only reflects the characteristics included in the quotas.

how can businesses reduce bias

Use representative samples, Use neutral wording, Avoid leading questions., Use appropriate sample sizes, Train interviewers, Collect responses anonymously where appropriate, Compare results from different research methods.

what is the usefulness of sampling for a business and its stakeholders

Sampling allows a business to obtain information from a manageable number of people This can make market research faster and cheaper.

usefulness For the business: Good sampling can: improve decision-making, reduce uncertainty, reduce research costs, identify customer preferences Poor sampling can: produce misleading information, cause incorrect decisions, waste money, result in inappropriate products, prices or marketing strategies

For stakeholders

Customers: Better research may result in products that better meet their needs.

Employees: Accurate market information can contribute to business success and job security.

Owners/shareholders: Better decisions may improve profitability and returns.

Managers: More reliable information can improve strategic decision-making.

Suppliers: More accurate forecasts of demand may improve ordering and production decisions.