market research
gathering, presenting and analysing information regarding the marketing and consumption of goods and services
purposes of market research
identify and understand customer needs
identify gaps in the market
to reduce risk
to make informed business decisions
identifying and understanding customer needs
businesses are successful if they supply products that meet customer needs
how does identifying and understanding customer needs help a business?
it helps a business design products that meet the specific needs of the customer
how should businesses respond to the changing market?
businesses should be able to anticipate customer needs and respond quickly as trends change
identifying gaps in the market
businesses can identify untapped markets and spot a gap to gain a competitive edge
how does identifying gaps in the market help a business?
businesses can generate higher levels of revenue and profit before a competitor arrives
reducing risk
businesses can carry out effective market research as markets get larger to avoid failure when launching a new business or new products
how does reducing risks help a business?
it'll help avoid loss and costly product failure which can lead to a very high cost
making informed business decisions
the quality of a decision improves greatly by access to meaningful and detailed information, especially when marketing
what methods do businesses use to gather new information?
primary or field research
primary or field research
the gathering of new information which hasn't been collected before
advantages of primary data
original
needs adapted to business
disadvantages of primary data
time consuming
expensive
main methods for gathering primary data
questionnaires
focus groups or consumer panels
observation
test marketing
questionnaires
list of questions used to record views and opinions of respondents
what does a good questionnaire include?
open and closed questions
clear and simple questions
not leading questions
be short
different types of questionnaires
postal surveys
telephone interviews
personal interviews
online surveys
focus groups or consumer panels
used to obtain detailed information in which customers are invited to a discussion led by market researchers
advantage of consumer panels
cost effective
disadvantage of consumer panels
group of customers may be small so results may not be reliable and might be difficult to generalise
observation
market researchers watch customers and their behaviour
test marketing
selling a new product in a limited geographical area to evaluate sales before a national launch and modify using feedback
secondary or desk research
businesses collect existing information
two types of secondary data
internal and external
internal secondary data
exists inside the business organisation
external secondary data
exists outside the business organisation
advantage of secondary data
quicker and easier to gather
disadvantage of secondary data
may be inaccurate and out of date
examples of secondary research
business websites
competitors
media
internal data
government publications
commercial publications
qualitative data
information about attitude, beliefs and intentions usually either written down or recorded
quantitative data
expressed in numbers and can be measured
role of social media in collecting market research data
social media provides a cheap way of gathering information about a firm's customers, market, brand appearance and other market issues
how does social media help in collecting market research data?
by searching the latest posts and popular terms it is easy to gain some understanding of emerging trends and see what customers are talking about
advantages of using social media for market research
broad reach
specific targeting
low cost
personal
fast
easy
importance of reliability of market research data
decisions based on data won't be sound if the data is out of date or inaccurate
how do businesses ensure reliability of market research data
businesses use a sample of people that represent a proportion of the entire market