4.4 MARKET RESEARCH
Process of collecting, recording and analysing data about customers, competitors and the market
Why organisations carry out market research?
To reduce the risks associated with new products launches
To predict future demand changes
To explain patterns in sales of existing products and market trends
To assess the most favored designs, flavors, styles, promotions and packages for a product
How organisations carry out market research ?
primary research
secondary research
qualitative research
quantitative research
the collection of first-hand data that are directly related to a firm's needs
collection of data from second-hand sources
research into the in-depth motivations behind consumer buying behavior or opinions
research that leads to numerical results that can be presented and analysed
SURVEYS
INTERVIEWS
FOCUS GROUPS
OBSERVATIONS
TEST MARKETING
detailed study of a market or geographical area to gather data on attitudes, impressions, opinions and satisfaction levels of products or businesses, by asking a section of the population
a group of people who are asked about their attitude towards a product, service, advertisement or new style of packaging
a qualitative method of collecting and analysing information obtained through directly or indirectly watching and observing others in business environments
marketing a new product in a geographical region before a full-scale launch
Questionnaire design
open questions
closed questions
those that invite a wide-ranging or imaginative response
questions to which a limited number of preset answers is offered
EVALUATIONS
ADVANTAGES
DISADVANTAGES
Up to date
relevant
collected data for a specific purpose
directly addresses the questions the business wants answer to
confidential-no other business has access to this data
costly
time-consuming
doubts over accuracy and validity
MARKET INTELLIGENCE ANALYSIS REPORTS
ACADEMIC JOURNALS
GOVERNMENT PUBLICATIONS
LOCAL LIBRARIES AND LOCAL GOVERNMENT OFFICES
TRADE ORGANISATIONS
MEDIA REPORTS AND SPECIALIST PUBLICATIONS
INTERNAL COMPANY RECORDS
THROUGH INTERNET
Evaluations
Advantages
Disadvantages
cheaper and faster
range of sources
insight to trends
may become obsolete or out of date quickly
may be in an inappropriate format
partial information
widely available to competitors
used to get feedback to understand motivation, behavior, perception through focus groups, expert panels, in-depth interviews of credible individuals
explore attitudes and opinions and can be very deeply relevant even if only few are interviewed
can only give an indication and does not have statistical relevance
relatively inexpensive but harder to analyze, more time consuming, and results are subject to bias or skill or interviewer
used to get statistical data from total (for figure) or representative sample (for opinion, decisions), using interviews that have closed questions or use ranking or sliding scales
quantitative can only ask factual answers but may not reveal reasons why
a larger representative sample is needed and must be designed well so it ends up more costly to undertake
SAMPLE
Group of people taking part in a market research survey selected to be representative of the target market overall
methods of sampling
quota sampling
random sampling
stratified sampling
cluster sampling
snowball sampling
convenience sampling
drawing representative selection of people because of the ease of their volunteering or selecting people because of their availability or easy access
using one or a number of specific groups to draw samples from and not selecting from the whole population, e.g. using one town or region
every member of the target population has an equal chance of being selected
gathering data from a group chosen out of a specific sub-group, e.g. a researcher might ask 100 individuals between the ages of 20 and 30 years
this 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
using existing members of a sample study group to recruit further participants through their acquaintances
minimize bias
time consuming
generalized to the whole population
decide the number of samples you want
identify the number of members in each layer
of samples to be taken from a layer is calculated
total of samples divided by total population *number of members
sort by mutual characteristics, its chosen sampling not random
by age group, gender or interest, job
specific, target market
does not represent majority population