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What is market research?
the systematic and objective collection analysis and evaluation of information that is intended to assist the marketing process
What is primary market research?
collection of information gathered first hand of the specific purpose of the initial user
Surveys, focus groups, test marketing, experiment
What are the benefits of primary market research?
experiment-
relatively cheap
Considers actual customer behaviour rather than opinions given in a questionnaire
Observation
examines customer behaviour in detail
Can reveal problems
Focus groups
can gather information on why customers react the way they do and can help modify the products
Can help uncover new ideas on how to market products or services
Surveys
a wide range of info can be obtained
Cheap
Avoid bias if a postal interview
What are drawbacks of primary market research?
experiment
consumer behaviour may not be the same through the country
May delay the introduction of a potentially successful strategy
observation
expensive to employ specialist psychologists to observe relatively limited behaviour
Shows what is happening rather than why it is taking place
Focus groups
sometimes an element of bias
Expensive to operate
Surveys
can be time consuming
Response rates can be low
May not be representative
Sample can be biased towards people with a particular interest in the product or service
What is secondary market research?
information that has already been collected for a different purpose
Government publications, newspapers, magazines, company records, competitors, market research organisations, loyalty cards, internet
What are the benefits of secondary market research?
the information is already available so quick decisions can be taken biased upon it
It is cheaper than primary research
Secondary surveys are often conducted regularly so the info obtained is particularly helpful in identifying trends overtime
What are the drawbacks of secondary market research?
the info may be dated and therefore could be misleading
Since the info is available to other organisations it is unlikely to give the business any advantages over its competitors
There may be no relevant secondary data to meet the specific needs of the business
As the data are collected by other organisations for their own use the secondary user won’t know the level of accuracy and reliability of the data consequently there is a danger that over reliance on the data could lead to poor marketing decisions
What is qualitative market research?
collection of information about the market based on subjective factors such as opinions and reasons
What are benefits of qualitative market research?
can gain a greater insight into what a business needs to do to appeal to its customers
Can highlight issues what the business was not aware of
Can give detailed insights into customers thinking processes when they buy products
What are the drawbacks to qualitative market research?
it is expensive- so is usually collected in small groups which can lead to bias or unrepresentative opinions
Difficult to tabulate the data and compare it with other data
What is quantitative market research?
collection of information about the market based on numbers
What are the benefits of quantitative market research?
summaries data into a concise and meaningful way
Makes it easier to compare results with those of other organisations such as competitors or other divisions of the same organisation
Can be used to identify trends and project future trends
What are the drawbacks of quantitative market research?
only shows what feather than explaining why
Can lack reliability and validity if the sample is biased or too small
How do you calculate market growth?
(Change/original) x 100
How do you calculate market share?
(sales of one product/total sales in the market) x 100
how do you work out sales growth?
(Change/original) x 100
Who do you work out market size?
(Sales/market share)x 100
