CHAPTER 18- MARKET RESEARCH

Definition

Market research = Collecting, recording & analysing data about customers, competitors, and markets. Used to measure reactions to: products, packaging, prices, distribution methods, promotions.

Purposes of Market Research

1. Identify market features – size, growth, competitors.

   • Adv: Helps assess market potential & risks.

   • Disadv: Market data may be outdated or inaccurate.

2. Identify consumer characteristics – wants, needs, demographics.

   • Adv: Allows accurate targeting & segmentation.

   • Disadv: Consumer behaviour can change quickly.

Types of Market Research

• Primary Research (field research) = First-hand data collected for specific needs.

• Secondary Research (desk research) = Using existing data collected for another purpose.

Primary Research

• Advantages:

  • Directly relevant, specific to business needs.

  • Provides up-to-date information.

  • Can explore qualitative factors (opinions, attitudes).

• Disadvantages:

  • Expensive and time-consuming.

  • Risk of survey bias (poorly designed questions).

  • Small samples may reduce accuracy.

Secondary Research

• Advantages:

  • Cheaper, faster to access.

  • Often uses large samples \to reliable.

  • Useful for understanding market trends and as a baseline.

• Disadvantages:

  • Data may be outdated or irrelevant.

  • Not tailored to business needs.

  • Reliability depends on source.

Big Data

Huge amounts of publicly available data (e.g., social media, retail purchases, healthcare).

• Adv: Provides deep insights, wide sources for cross-checking.

• Disadv: Requires expensive analysis tools and expertise.

Sampling

Definition: Selecting a group of respondents from a larger population.
Need: Whole population is too large, costly, or impossible to research.

• Advantages:

  • Saves time & cost compared to full population survey.

  • Useful for quick decision-making.

• Disadvantages:

  • Small samples may be unrepresentative.

  • Sampling bias risk \to inaccurate results.

  • Poor sampling methods reduce reliability.

Reliability of Data

Sources of bias:

• Sampling bias (unrepresentative sample).

• Questionnaire bias (leading questions).

• Response bias (dishonest answers).

Data Analysis (Quantitative)

• Mean: Arithmetic average.

  • Adv: Uses all data values.

  • Disadv: Distorted by extreme results.

• Mode: Most frequent value.

  • Adv: Easy to identify, useful in retail (most popular product).

  • Disadv: Not useful if data has no repetition.

• Median: Middle value.

  • Adv: Not distorted by extremes.

  • Disadv: Ignores other values.

• Range: Highest – lowest.

  • Adv: Simple measure of spread.

  • Disadv: Only uses two data points \to unreliable.

Qualitative Research

Explores opinions, attitudes, beliefs (e.g., why consumers prefer/dislike a product).

• Advantages:

  • Explains reasons behind consumer behaviour.

  • Provides insights into needs/wants for innovation.

• Disadvantages:

  • Small samples, subjective results.

  • Harder to quantify or generalise.

Presentation of Data

• Tables: Organised, precise presentation.

• Pie Charts: Show proportions clearly.

• Line Graphs: Show trends and seasonal changes over time.

• Bar Charts: Easy comparison across items/time.

• Advantages: Makes data easier to interpret and communicate.

• Disadvantages: Risk of misleading visuals if scaled improperly.