4.4 MARKET RESEARCH
Market research is a process of collecting, recording and analysing data about customers, competitors and the market
Reasons on conducting market research
To predict future demand changes
To explain patterns in sales of existing products and market trends
To reduce the risks associated with new product launches
To assess the most favoured designs, flavours, styles, promotions and packages for a product
Sources of market research
Secondary Research: Is the collection of data from second-hand sources
Qualitative Research: Research into the in-depth motivations behind consumer buying behaviour or opinions
Primary Research: Is the collection of first-hand data that are directly related to a firm's needs
Quantitative Research: Research that leads to numerical results that can be presented and analysed
Methods of Primary data
Focus group
Observations
Interviews
Test marketing
Surveys
Sources of Secondary data
Trade organisations
Local libraries and government offices
Media reports and specialist publications
Government Publications
Internal company records
Academic journals
The internet
Market intelligence analysis reports
Ethical consideration of market research
Researchers should have permission of the people they will be studying
Data collection methods should not cause physical or emotional harm to respondents
Consider the objectivity versus subjectivity in research
Findings are kept anonymous
Should not take advantage of easy-to-access groups of people
Should accurately presenting the data and analysis
Type of sampling
Cluster sampling: Using one or a number of specific groups to draw samples from and not selecting from the whole population
Quota sampling: Gathering data from group chosen out of a specific sub-group
Stratified sampling: Draws a sample from a specified sub-group or segment of the population and uses random sampling to select an appropriate number from each stratum
Snowball sampling: Using existing members of a sample study group to recruit further participants through their acquaintances
Random sampling: Every member of the target population has an equal chance of being selected
Method of presenting data
Bar charts
Pie charts
Histograms
Line Graphs
Pictograms
Average measure of data
Mode
Median
Mean
Advantage: Includes all data in its calculation
Disadvantage: Affected by one or two extreme results
Use: Indicator of likely sales levels per period of time
Advantage: Easily observed and no calculation needed
Disadvantage: Result is estimated from the modal group
Use: As the most frequently occurring
Use: Used in wage negotiations
Advantage: Less influenced by extreme results
Disadvantage: Cannot be used for further statistical analysis
Tables
When wide range of results need to be recorded
When there is a lot of text to include with the result
When the trend and regular variations need to be identified
When time is one of the variables
When the absolute magnitude of results need to be compared
When component can be used to show the total figure
Wants to attract the reader towards looking at the data
Presenting frequency data visually when the range of data has been broken into class range
Showing the relative importance sections
Convenience sampling: Drawing representative selection of people because of the ease of their volunteering or selecting people because of their availability or easy access
Evaluation
Disadvantages
Advantages
Confidential
Relevant
Up to date
Costly
Time-consuming
Doubts over accuracy and validity