3.2.1 The role of Market Research and Methods

Used:

Central Question

Will quality market research guarantee

success?

Learning Outcomes

• To understand what a market-oriented business is and how it uses market research

• To understand what Primary research and Secondary research is – the methods that can be used and the benefits and limitations of each

• To understand the following methods of primary market research – postal questionnaire, online survey, interviews, focus groups, the need for sampling

• To be aware of the factors influencing the accuracy of market research data.

Market Research

This is how businesses collect information

about their market or consumers

What type of information might business want to

find out?

Some reasons for Market Research

• Whether customers will buy the product• How often customers will buy the product• The price that customers are willing to pay• The type of customers interested in the product• Where the product should be sold

These are known as Market Oriented businesses

So…

What Information might these companies gather?

Methods of Market Research

• Primary research (Field ) - NEW or firsthand data:

- Questionnaires - Surveys- Consumer panels - Testing and observing- Focus groups

• Secondary research (Desk) – OLD data that has already been collected:- Newspapers, Government statistics, research companies, National and International government agencies-

Primary ResearchADVANTAGES DISADVANTAGES

Secondary ResearchADVANTAGES DISADVANTAGES

Task – 5 minutes

• In Groups you will be assigned one method of Market Research to investigate and then feedback.

• You need to:- Research the Advantages and Disadvantages

of using this method- Consider possibility of bias and accuracy- Can you give ‘real life’ examples of companies

that you have used this method and why they used it.- Was this the most suitable method do you think?

Methods

Primary Secondary

Postal / Online Questionnaire

Government statistics

Online Survey Newspapers and News stations

Focus Group Non Governmental Organisations (NGO’s) e.g. WHO, UN, UNICEF.

Interviews Company reports

What is Bias and what is its relevance to Market

Research?

• Random sampling– Collecting data from ‘random’ people– Can lead to unrepresentative sample

• Quota sampling– Dividing the population in to segments

before taking the appropriate sample from each section – could be done by age, gender, income

Sampling

• Watch the Video and consider the folllowing questions:

1. What is sampling?2. What is Random sampling?3. What is Cluster sampling?4. Which method is best?5. How can you minimise bias?6. What could happen if you do not plan your

market research correctly?

Video

Types of Data / Information

• Quantitative – based on numbers – 56% of 18 year olds drink alcohol at least four times a week - doesn’t tell you why, when or how

• Qualitative – more detail – tells you why, when and how!

Qualitative or Quantitative Answers?

1. Gender?2. Age?3. Three words that describe you?4. Favorite Color?5. How many times per week….?6. Why do you choose Starbucks?7. How much do you spend per week?8. Your feelings on abortion?9. Do you agree with abortion?10. Rank your top 3 choices? …… Say Why?

What is the value of each type of

data?What is the right

balance?

80/20 Rule?

Primary Research Methods - QUESTIONNAIRES

Advantages Disadvantages

INTERVIEWS

Advantages Disadvantages

FOCUS GROUPS

Advantages Disadvantages

ONLINE SURVEYS

Advantages Disadvantages

EXPERIMENTS

Advantages Disadvantages

SAMPLING

Advantages Disadvantages

RANDOM: QUOTA:

Primary Research – Who To Ask?

• A Business needs to carefully decide WHO it requires information from.

• Therefore the business must decide what the TARGET MARKET for the product is likely to be

Secondary Research

Secondary Research Methods

Newspapers / News Stations

Advantages Disadvantages

Government Statistics

Advantages Disadvantages

NGO’s

Advantages Disadvantages

Company Reports

Advantages Disadvantages

External Sources

• Government Statistics (ONS)• EU - Euro Stat• Trade publications• Commercial Data - Gallup, Mintel, etc.• Household Expenditure Survey• Magazine surveys• Other firms’ research• Research documents – publications, journals,

etc.

ACCURACY OF INFORMATION

• • •

•

Designing a questionnaire

A successful questionnaire will:

• Have simple, clear questions that link directly with the information needed

• Not ask too many questions

• Ask the questions in a common sense order

• Record the data quickly and conveniently

Types of Questions

• Closed question – this is where the person answering chooses from pre-set answers, often by ticking a box.

• Open questions – this is where people can answer them in their own words and give their own opinions, but it is much more difficult and time-consuming to analyse this sort of reply.

Questionnaires

Careful design required:

• Not too long• Clear and concise questions• Avoid open-ended questions• Unbiased – no leading questions• Incentive to complete• Logical Order

FINALLY………

CONSIDER:

• HOW MANY PEOPLE TO ASK• DAY AND TIME OF DAY • LOCATION TO ASK PEOPLE – one or several?

Analysis and Evaluation of Findings from Questionnaires

• Once a survey has been completed the data collected can be presented in the following forms:– Tables– Charts– Graphs