Research

Market research

• the process of finding out about customers, competitors and market conditions

Why market research is important:

• understand their competition
• make your company stand out from the competition (USP)
• narrow down target market
• know what customers are looking for - in the market’s current position
• get a better knowledge of product (costs/pricing)

Primary - field research

• carrying out your own research specifically for your business
  • focus groups
  • test marketing
  • questionnaires
• ==advantages==:
  • data collected is relevant to specifics
  • reliable research
• ==disadvantages==:
  • takes longer to collect
  • bias may occur

Sampling bias

==bias== - a factor that causes research findings to be unrepresentative of the whole demographic (population)

• [[sampling involves collecting data from a group of people who will be ==representative of the target market or population== as a whole[[
• choosing a sample size is a ‘==trade off==’
  • large sample = more accurate
  • small sample = quicker + cheaper

Primary research methods

• ==focus groups== - an in-depth discussion with a small group of consumers

  + explores ideas in-depth = find out attitudes + motives behind purchasing decisions

  + encourage creative ideas from participants = deepens understandings of what they want

  - expensive

  - not everyone is AS involved = lack of detail given in answers

  - people may not be honest about their answers = false understanding of what is going right + wrong with a product

• ==test marketing== - a form of product trial

  + launching a product in a small proportion of the market gives the ability to evaluate the response to it

  + ability to gauge potential demand

  the test market must be similar to the ultimate target market in order for this method to be effective

→ product trial - where customers buy it once to see if they like it

+ successful product trials lead to repeat purchases

→ repeat purchases - customers deciding to buy a product on a regular basis

• ==questionnaire/survey== - a set of questions designed to discover information relating to a product/service

  + cheap

  + quick

  + can be both/either qualitative + quantitative

  - it’s only as good as what’s in the questionnaire

  - hard to get people to return the questionnaire

  - people may not take it seriously

• ==observation== - when you study people’s behaviour in relation to your business (purchasing product)

  + can see who is buying your products most (demographic)

  + find out which product is best-selling, look at their USP

  + look at what

Secondary - desk research

• looking at research that has already been made (carried out for another purpose)
  • market reports
  • government data (demographic + economics)
  • internet
  • trade publications/sites
• ==advantages==:
  • easy to get + use
  • sample size is likely to be larger than primary research
  • lots of readily available info that can be accessed
• ==disadvantages==:
  • unsure about reliability or accuracy of research
  • accounts must be accurate to give valid results
  • bias may occur

Quantitative research

• results are numerical and can be statistically analysed
• ==advantages==:
  • easy to display data visually through graphs
• ==disadvantages==:
  • difficult to place appropriate value towards numbers

Qualitative research

• results are based on opinions and feelings
• ==advantages==:
  • ability to grasp how customers feel about product
• ==disadvantages==:
  • difficult to represent statistical analysis

\

Market segmentation

the process of dividing up the market into different groups and studying their particular needs + wants

• this enables firms to differentiate their product + their marketing strategies to meet each segments needs

ways a firm can segment a market:

• age
• gender
• income
• religion/ethnicity
• lifestyles
• location
• interests
• qualifications

advantages:

• you can have a product which is very well suited to your target audience
• you are able to carry out specific research on people who you have selected as your target audience (differentiate from the competition)
• customer satisfaction leads to loyalty

disadvantages:

• market segmentation can be a very lengthy + expensive process
• if carried out incorrectly it is a large waste of money
• might have to narrow down the market too much

\
\