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4.4: Market Research (How Organizations Carry Out Market Research (Sources…

- - - - qualitative research: research into the in-depth motivations behind consumer buying behaviour or opinions
      - quantitative research: research that leads to numerical results that can be presented and analysed
      - why consumers will or will not buy a particular product
      - may establish size of the potential market
  - - - survey: detailed study of a market or geographical area to gather data of products or businesses by asking a section of the population
      - data gathered:
        
        atitudes
        
        impressions
        
        opinions
        
        satisfaction levels
      - by means of a questionnaire
      - obatin both qualitative & quantitative research
      - :four: important issues
        
        Who to ask
        
        What to ask
        
        How to ask
        
        How accurate is it?
    - - conducted by an interviewer
      - in the street or in respondent's home
      - avoid bias in how to ask questions
      - detailed questions can be explained
      - follow-up questions con be asked
      - can be EXPENSIVE
    - - focus groups: group of poeple who are asked about their attitude towards a product, service, advertisement or new packaging
      - ask questions & group discusses responses
      - all members free to talk with other members
      - discussions are often filmed
      - info. more acurate than individual questionnaires
      - RISK of researcher influencing discussion too much
    - - observational techinque: qualitative method of collecting & analysing info. abotained by direct or indirect observation
      - oldest technique
      - watch how customers respond to stimuli
      - :check: small businesses
      - EX: Cookies in websites
      - Focus groups use observational techniques
      - relatively INEXPENSIVE
      - observer completely unseen is better
      - is time consuming
      - does NOT provide qualitative ecidence
    - - test marketing: marketing a new product in a geographical region before a full-scale launch
      - takes place after decision of producing limited quantity of new product before full-scale
      - promote & sell in limited area then recording reacctions & sales figures
      - reduces risk of new product failure
      - evidence not always completely accurate
  - - - difficult to collate & present numerically
      - provide insight into consumer "thinking"
      - :forbidden: all open questions
      - usually end questionnaire with :one:
    - - results are easy to present & analyse
      - offer little scope for explanation or reasoning
    - - Make objectives of research clear so questions can be focused there
      - Write clear & unambiguous questions
      - Make sure questions follow in logical sequence
      - Avoid questions that point to :one: particular answer
      - Use easy to understand language
      - Include questions that allow classification by gender, area lived in, ocupation, etc.
  - - - never up to date
      - may not provide answers to specific questions
      - is available to competitors
    - - extremely detailed reports on individual markets & industries
      - produced by specialist market research agencies
      - very EXPENSIVE
      - usually available at local business libraries
      - EX
        
        Mintel Reports
        
        Key Note Reports
        
        Euromonitor International
    - - focus on the science & techniques involved in market research
    - - used for:
        
        population census
        
        Social Trends
        
        Annual Abstract of Statistics
        
        Living Costs & Food Survey
    - - if data needed is for a small area
      - data:
        
        Local Population Census: total population size, age & occupation distributions
        
        Number of Households in the Area
        
        Proportions of the Local Population from Different Ethnic & Cultural Groups
    - - they produce regular reports on state of the markets their members operate in
    - - question the primary resource of the data, who collected it & existance of potential bias
    - - secondary data like:
        
        customer sales records
        
        guarantee claims from customers
        
        daily, weekly & monthly sales trends
        
        feedback from customers on product, service, delivery & quality
    - - accuracy & relevance should ALWAYS be checked
      - secondary research will nearly always indicate the focus that subsequent primary research should have
  - - - quota smapling: gathering data from a group chosen out of a specific sub-group
      - the selection of the sample is non-scientific
      - may be biased
      - main weakness: not everyone gets a chance of selection.
    - - random sampling: every member of the traget population has an equal chance of being selected
      - needs:
        
        a list of all the people in the target population
        
        sequential number given to each member of population
        
        list of random numbers generated by computer
      - asking the first pedestrians who pass by during a survey is not random sampling
    - - stratified sampling: draws a sample from a specified segment of the population & uses random sampling to select an appropiate number from each stratum
      - target population made up of many different groups
      - STRATA or LAYERS of the population
      - people to be surveyed in each stratum should be selected randomly
    - - cluster sampling: using a number of specific groups to draw samples from
      - may not be fully representative of whole population
      - reduces costs
      - random methods can then be used to select the sample from this group
    - - snowball sampling: using existing members of a sample group to recruit further participants throught their acquaintances
      - first person refers a friend etc.
      - CHEAP
      - can be operated through social networking
      - likely to lead to a biased sample
    - - convenience sampling: drawing representative selection of people because of ease of their volunteering
      - selecting people because of their availability or easy access
      - data gathered quickly
      - risk that the sample might not represent the population as a whole
      - possible bias by volunteers
  - - - Tables
      - Line Graphs
      - Bar Charts
      - Pie Charts
      - Histograms
      - Pictograms
- - - - market size & consumer tastes & trends
      - the product & percieved strenghts & weaknesses
      - the promotion used & effectiveness
      - competitors & their unique selling propositions
      - distributions methods preferred by customers
      - customers' preferences of packaging