Chapter 2: Market Research

pg. 20

What is market research?

Market research is the collection, presentation and analysis of information relating to the marketing and consumption of goods and services

• It involves gathering, presenting and analysing information about the marketing and consumption of goods and services

What are the uses for market research data?

1. To identify and anticipate customer needs and wants

2. To quantify likely demand

3. Gain an insight into consumer behaviour

Explain: To identify and anticipate customer needs and wants

• Businesses will benefit if they can clarify the specific needs and wants of consumers

• In order to create products according to those needs, they need to identify the product features that people desire

• The data that market researchers gather need to be as comprehensive as possible so that all the needs and wants are identified

  • This data will be qualitative

Explain: to quantify likely demand

• Businesses need to find out how much of a product a business might expect to sell in a market

• This is to help determine whether or not a particular product is going to be commercially viable

  • If the research finds that demand is inadequate a business might cancel the launch of a product which could save a lot of money

  • If demand is adequate, the business will need to quantify it and only then can it plan production of the product

Explain: to gain insight into consumer behaviour

• Businesses might be more successful if they can identify and understand patterns of consumer behaviour

• Getting an insight into how people behave will help a business to meet customer needs more effectively

  • This is qualitative data and might also help them to identify new opportunities

What is primary research?

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• It involves collecting primary data.

This is information that did not exist before the research began. In other words, it has to be collected by the researcher

Who carries out primary research?

Primary research can either be carried out by a business itself or by a market research agency

• Because of the high costs of using the services of a market research agency, many small businesses choose to conduct market research themselves.

How is primary research data gathered?

1. Questionnaires/surveys

2. Focus groups or consumer panels

3. Face-to-face/telephone interviews

4. Product trials/test marketing

Explain how primary research is gathered by questionnaries/surveys

Questionnaires are lists of written questions

A good questionnaire will have these elements:

• Balance of open & close questions

• Clear and simple questions.

• No leading questions

• Short/concise length