4.4 - market research

What is market research?

the marketing activities designed to discover the opinions and preferences of potential customers

What is market analysis?

This is information which can be gathered from market research firms, competitors etc., and reveals the characteristics and trends for a particular product or industry

What is the difference between market research and market analysis?

Market research is the process of collecting information to understand consumer behavior and preferences

Market analysis is the evaluating and interpreting data to draw conclusions in order to make decisions

Why is market research good for a business?

• It gives the business up-to-date information

• helps firms find their target customers

• helps firms to identify the customer reactions to products

• helps firms understand the activities and strategies used by their rivals

• helps firms understand trends for the future

What are the types of market research?

Primary and secondary

What is primary research?

Gathering new and first hand data for a specific purpose

What are advantages and disadvantages of primary data?

• only relevant and specific data for the business is collected

• confidential and unique to the purpose of the business

• Time consuming and costly process

• reliability can be questionable is research is poorly conducted

What are the different types of primary data?

• Surveys

• Interviews

• Focus groups

• Observations

Why may surveys not be ideal?

The questions may be difficult to understand and cause misunderstandings → not flexible, and you don’t gain extra information which could be useful

Why may interviews not be ideal?

The one-to-one discussions are time-consuming and difficult to analyse

Why may focus groups not be ideal?

These are small discussion groups to gain insight into opinions and attitudes of respondents. They tend to be dominated by extroverts, and costly as each particepant has to be paid.

Why may observations not be ideal?

Watching how people behave and respond in certain situations (e.g., through surveillance cameras) is often illegal or unethical, and they don’t reveal the reason why people behave in the way they do

What is secondary research?

Using second-hand data that already exists and was collected by others for a specific purpose

What are advantages and disadvantages of secondary research?

• less costly and time-wasting that collecting primary data

• huge range of sources and information

• it may be difficult to find useful information specific to a businesses purpose

• information is widely available to competition → it doesn’t give a business an edge

What are the different types of secondary data?

• government publications (published data from the government, such as inflation rates or social trends)

• magazine articles

• academic journals (publications from education and research institutions)

What is qualitative vs quantitative research?

Qualitative research are non-numerical answers and opinions from respondants, which is primary used to understand their behaviours and attitudes

Quantitative research is numerical and measurable informations, rather than people’s opinions

What are advantages of qualitative research?

• greater flexibility as answers are easier to understand

• better for exploring behavior and attitudes

• Time and cost savings, as a lot of information from a small number of respondants can be gathered

What are disadvantages of qualitative research?

• difficult to analyse answers and put them into statistics

• difficult to sample large part of the population → only a small sample isn’t representative of whole population

• The interviewer must be highly experienced in facilitating useful information from respondents

What are advantages of quantitative research?

• easier to sample larger part of population → more representative of whole population

• can put data into statistics and analyse

• no need for experienced interviewer → survey questions can be quite easily created

• unnessecary information is avoided

What are disadvantages of quantitative research?

• extra information which could potentially be useful isn’t obtained

• Misunderstandings of questions asked → inflexible answers

• need sample of large population to gather enough information

What are the different types of sampling methods used for collecting primary data?

• quota sampling (a certain number of people from difference market segments and mirror population proportions)

• random sampling (minimizes bias and is representative)

• convenience sampling

What are some ethic concerns when collecting data samples?

The data must not be used in unethical ways. Companies must avoid:

• Dishonesty

• Damage

• Deception

• Disclosure

• Detachment