Theme 1: Marketing & People

3.2.1 Understanding markets and customers – Market research How would you try to discover if there is a market for this product?

Q UALITATIVE AND QUANTITATIVE DATA  Qualitative research is the gathering of non-statistical information that gives a company in depth insight into the reasons for human behaviour  Quantitative research is the gathering of statistical data to inform the company about people’s behaviour but does not identify the reasons To what extent do you think quantitative data is more useful than qualitative data in informing marketing decisions?

Quantitative and qualitative market research Market research can be classified according to its content. Qualitative market research: Information gathered through research methods about people’s views, opinions and beliefs. Including how they feel about products/brands/companies and why they feel this way For example, consumers view the brand as fashionable and aspirational Think Quality – Qualitative – views, opinions Quantitative market research: Numerical and statistical information gathered through various research method Gathered from closed question For example, 50 per cent of people liked the product Think Quantity – Quantitative - numbers 4

Why the need? You are passionate about the idea/product/service – is everyone else? What dilemma might an entrepreneur face when considering whether to carry out market research?

BUSS1.5 Conducting start-up Market Research Size and types of samples Businesses cannot ask for the opinions of all potential customers and therefore try to chose a representative sample. Sample – a group of subjects that has been chosen from a larger group (population) for investigation. How many people (sample size) should a small business have in a sample? 1.How big is the budget? 2.How accurate should the findings be? 3.How confident are you in the survey results? The larger the sample the more accurate the results, the greater the confidence in the findings but the greater the cost of the survey. Does market research have to be expensive?

Firms will be unable to survey every individual they hope to sell their product to or whom they wish to get views opinions and data from due to time and cost. Therefore they will select samples of people (respondents) whom they will use to complete their market research. Sample: A group of respondents whose views, characteristics and behavior should represent the overall target market. There are a number of different sampling methods which firms might use. Some of them include: 1.Random 2.Quota 3.Stratified The value of sampling 7

TYPES OF SAMPLING TECHNIQUES  Random  a sample is selected for study from a population where each individual is chosen entirely by chance and has an equal chance of being selected  Quota  The population is first segmented into subgroups before a judgement is made in selecting respondents that are representative of that subgroup  e.g. within a sub group of women 60% may be aged 20-40, 20% and 20% 61+, the sample should represent this  Stratified  The population is first segmented into subgroups before respondents are randomly selected from within that subgroup  e.g. within a subgroup of year olds any member of the population has an equal chance of being selected

T EST YOURSELF End 1.Distinguish between primary and secondary research. 2.Distinguish between qualitative and quantitative data. 3.What is meant by the term quota sampling? 4.State two other sampling techniques.

Discussion questions Based on what we have discussed about sampling: 1.Produce a list of the main benefits and drawbacks of using sampling. 2.Debate with your partner the following issues: How worthwhile sampling is for different types of firms when finding out about the popularity and introduction of new products. How should each of the following sample? -Supermarket e.g. Morrisons -High-street fashion retailer e.g. Topshop -Football club e.g. Manchester United -Mobile phone firm e.g. Samsung -Model railway manufacturer e.g. Hornby 3.What might influence a firm when deciding on what sampling method to use? 10

Factors influencing the choice of sampling methods: Time to complete research and make decisions Costs involved and financial situation of the firm Stage of life cycle for the firm and its product/services Is it a new or existing product/firm? Market position of the firm – Is it a mass or niche market? Target audience and their characteristics How focused is the target audience? Are their needs and wants very specific and different from average? The firm’s existing knowledge of the market and customers 11

Market research plan: Activity Scenario 1: A new boutique, premium-priced hotel setting up in the city of Cardiff. Scenario 2: A game console manufacturer looking to investigate a range of new games to release. Scenario 3: A fast-food restaurant considering introducing new healthier options. Questions: For the scenarios above discuss in pairs and answer the questions below. 1.What secondary data might the business use? Where might they gather it form? 2.What sampling method might the entrepreneur use to decide who to collect primary data from? 3.What research method should be used to collect the primary data? 4.Decide whether the entrepreneur should collect quantitative or qualitative data, or a combination of the two. Justify your answers giving sound reasoning and demonstrating analysis. 12