4.4 market research

market research

• objective collection, compilation and analysis of info about a market

• helps to

  • reduce risk

  • understand future needs and wants of customers

  • identify potential gaps in markets to exploit

  • identify competitors and their strengths/weaknesses

• need ongoing to adapt marketing strategy to customer demands

primary research

• gather info directly from consumers

• new information that doesn’t currently exist in any format

• methods

  • surveys

  • observation

  • interviews

  • test marketing

  • focus groups

• adv

  • rise of social media: speed, cost, interactive r/s and continuous feedback

  • info is focused on needs of business + will not be available to competitors

  • in-depth info

  • up to date and can ask specific questions so more relevant

• disadv

  • sample size too small → not representative, unreliable

  • bias of researchers/respondents

  • may need to hire specialist market research agency → expensive/time consuming

surveys

• ask series of questions to respondents

• results from sample are used to make inferences → extrapolate results to apply to wider population

• wide range of respondents can be reached using online survey tools

• adv

  • large amt of data collected quickly

  • respondents can complete well-designed surveys easily

• disadv

  • poorly-conducted/designed surveys will result in poor results

  • poor response rates, especially for random sampling

observation

• hiring someone to stand in appropriate location to study consumer behaviour/traffic in a location

• adv

  • can get data on human behaviour

  • large numbers can be observed in short time

• disadv

  • need to combine with other primary research methods to understand cause

interviews

• like survey, but interviewer asks questions

• takes longer but interviewee can ask follow-up questions

• adv

  • in-depth questions provides detailed opinions and perceptions

  • can

    high response rates

• disadv

  • time-consuming because interviews are one-to-one

  • interviewer bias

  • can ask follow-up questions

test marketing

• free samples provided for limited period to target market, gauge response to product

• adjust product/marketing mix after feedback

• adv

  • can gather perceptions and opinions before full product launch

  • can attract early attention from potential customers

• disadv

  • producing and distributing free samples is expensive

  • competitors may become aware of new products that will be launched

focus groups

• free range discussions led by marketing specialist, collect detailed feedback on marketing mix

• usually 12-15 people meeting for 1.5-3 hours

• adv

  • detailed info on opinions

  • easy and inexpensive to organise because small

• disadv

  • participants may not share true opinions because it’s a group setting

  • rewards for participation may make it more expensive

secondary market research

• collection, compilation, analysis of data that already exists

• types

  • Government Publications

  • Academic Institutions

  • Industry Associations: detailed information about specific sectors, including market size, growth rates and industry benchmarks

  • Specialist Market Research Reports: Companies specialising in market research produce and sell in-depth reports on various industries, markets and consumer trends

  • Financial Reports: Public limited companies are required to publish financial reports, including annual reports which can provide valuable information about a company's performance, market position, and future plans

  • Online Databases

  • Media Sources

• adv

  • quicker to collect since info is already available

  • info is usually free and collecting is cheaper

  • suitable for small businesses without budget/expertise

• disadv

  • info collected for other purposes, may lack relevance or reliability

  • expensive to purchase data from specialists

  • info may be out of date

qualitative data

• descriptions or explanations

• based on discussions, impressions, emotions

• usually collected through primary research

• limitations

  • sample size may be too small, unrepresentative

  • biased researchers/respondents

  • may need hire specialist, expensive and time consuming

quantitative data

• based on numbers

• limitations

  • info collected for other purposes, may lack relevance/reliability

  • can be expensive to purchase from specialists

  • may be out of date in dynamic markets

  • data analysis and interpretation may be inaccurate

  • extrapolation can provide wrong assumptions

  • provides insights but not reasons for insights

sampling methods

• obtain representative sample by determining specific proportions of each group of the population

• adv

  • quick and easy

• dsiadv

  • not random, risk of bias

  • need to understand population to be able to apply results to market as a whole

random sampling

• every member of population has equal chance of selection

• adv

  • simple to design and interpret

  • reduced bias

• dsiadv

  • not representative of market as a whole since anyone can be selected

  • need compelete and accurate population listing

convenience sampling

• those willing to volunteer and easiest to access

• adv

  • respondents are readily available

  • large amounts of data gathered quickly

• disadv

  • biased if researcher knows them personally

  • not representative of market as a whole