business 4.4 -- market research

market research

refers to marketing activities designed to discover the opinions , beliefs and preferences of potential and existing customers

why do organisations carry out market research

1. To reduce risks associated with new product launches (estimate likely chances of a new product selling well)

2. To predict future demand changes (can change to future trend)

3. To explain patterns in sales of existing products and trend (analyse data make improvements)

4. to assess the most favoured designs / products (incorporate those designs/focus on those design /produce more products)

5. give businesses an understanding of activities and strategies used by their rivals

primary research

the collection of first hand data , that is , data are being collected by the firm for the first time for its own needs

primary research methods

1. surveys

2. focus groups

3. interviews

4. observations

survey definition

involve directly asking consumers or potential consumers , usually by means of a questionnaire , for their opinions and preferences

questionnaire

a document that contains a series of questions used to collect data for a specific purpose

types of surveys includes

2. self completed surveys

3. personal surveys

4. telephone surveys

5. online surveys

6. postal surveys

advantages of surveys

1. ability to generate quantitative and qualitative answers specific to the needs of the researcher

2. if designed properly —> simple to complete —> easier to gather market research data

3. geographically easier as it it just a link/ QR code

4. data easy to process can link to google sheets

disadvantages of surveys

1. costly and time consuming , it is necessary to get a large sample to get statistically representative findings. Wrong analysis = redo = waste time

2. biased or dishonest answers from respondents —> especially when they are uninterested or in a hurry

Interviews definition

involve one-to-one discussions between an interviewer and interviewee , such as individual customers , to investigate their personal circumstances and opinions

in person interviews can examine

body language — how one reacts to the question

attitudes + feelings + emotions written on their face etc

advantages of interviews

skilled interviewers will avoid bias in the way they ask questions + ask detailed questions that they will explain clearly to the interviewee so that interviewee fully understand and give a more accurate and honest answer

disadvantages of interviews

1. expensive —> must pay for interviewee

2. provide a range of non-quantifiable information that might prove to be difficult to analyse (no stats to analyse)

3. time consuming

4. interviewer might be bias

focus groups definition

consists of a group of people who share a similar consumer profile and are asked about their attitudes and behaviours

• best for new products about to be launched

• Eg: asking a group of people their attitude towards the product/service/packaging/price

advantages of focus groups

1. detailed questions can be asked —> insightful information

2. recordings of the discussion and observations of the behaviour of the participants are used by market research team as a source of data

disadvantages of focus groups

1. have to be paid either in cash or gifts/vouchers for their time and input

2. only extroverts tend to take part and those who shy from group discussions and debates are unlikely to participate and thus their views are unregistered

3. risk or researchers influencing the discussion turning it into biased conclusions being drawn

observations defintion

involves watching how people behave and respond in different situations

• often used to test product placement / how fast service is during peak hours/ how consumers react to promoted displays

advantages of observations

they record people’s actual behaviour

disadvantages of observations

they do not necessarily reveal why a person behaves or responds in the way they do

secondary research definition

the use and analysis or data that already exists. it is data information that has been previously gathered and already analysed

internal sources of secondary data

those are gathered by others, such as company annual reports and sale records

• company records

external sources of secondary data

refers to data that comes form outside the business

• eg competitors sales / government reports

external sources include

1. market analysis (market size/market share /market growth rate)

2. academic journals (periodical publications from educational and research institutions like Harvard business review)

3. government publications (population trends, unemployment figures ,inflation rates)

4. media articles (newspapers/journals /TV)

advantages of primary research

1. data is up to date

2. data is collected for a specific purpose that is directly relevant to the business, leading to more informed decision making

3. not available for other businesses ,competitive advantage

disadvantages of primary research

1. costly to collect (opp costs)

2. time consuming (delay in introducing new products into market)

3. risk of data being inaccurate + containing bias / sample does not show whole population = results do not reflect everyones opinions

advantages of secondary research

1. cheaper to obtain data than primary

2. quicker to obtain data —> increase speed of decision making

disadvantages of secondary research

1. out of date —> inaccurate decision making

2. has not been collected for the specific purpose required by the business , so may not be as reliable or useful as primary data