Market Research Unit 5 - slide 13

The Need for Market Research Please refer to page 46 of your notes Unit 5 - slide 13

Difference between Promotion and Research Promotion is the communication between the business to the consumer. Research is the communication from the consumer to the business. Importance? method used by business to anticipate the needs and wants of the customer. Therefore deciding how profitable the business will be. Unit 5 - slide 13

Included in research What type of consumers buy what product. What consumers think of a product. What prices they are are prepared to pay. What competition and potential competition may exist. Types of packaging and promotion which are appropriate. Best channels of distribution and where to sell it. Legal restrictions and regulations that apply to the product. Unit 5 - slide 13

Types of Market Research Primary Information also known as Field Research Secondary Information also known Desk Research Unit 5 - slide 13

Primary or Field Research - Revision Information up-to-date. Collected for exact purpose. Not available to competition as the business itself has collected it. Usually gathered through a survey. Unit 5 - slide 13

Population Too expensive and time consuming to carry out research on every consumer in the market – info would be out of date by the time you’ve collected it. Population refers to all the persons or companies you would like to direct questions to. More appropriate to take a sample of that population. Sample should be representative of the population. Unit 5 - slide 13

Sampling Three decisions required. Who is to be surveyed? Population that you plan to target in your research. Develop a sampling frame – ensures that everyone in the targeted population has a chance to be included. How many people/companies should be surveyed? The larger the sample, the more accurate your survey will be but it is expensive to carry out. How do we choose those to be included in the survey? Two main methods: Random sampling and Quota sampling. Unit 5 - slide 13

Random Sampling Producing a random list of individuals through the use of either a computer, telephone directory or electoral register. Advantage: no chance of bias when selecting individuals (won’t be choosing a group with particular views). Disadvantage: not focused on any particular market segment. Unit 5 - slide 13

Quota Sampling Preferred method of research. Selected proportion of the whole population by: Social status Gender Age etc. Advantage: cheaper to operate than random sampling as statistics are available showing the proportions of different groups. Disadvantage: Less representative than random as you are only focusing on a certain group. Unit 5 - slide 13

Gathering Information Used once you have decided upon your sample. Either done through Interview or Questionnaire. Unit 5 - slide 13

Questionnaire To gain information from the respondent on a wide variety of different issues. Included: What they own what they would like to own what they plan to buy their values, attitudes and beliefs. Unit 5 - slide 13

Design of Questionnaire Must be designed in a way that the respondent wants to complete. Purpose should be clear with an explanation of why they would benefit from completing it. Should be easy to understand Questions should not be based too much on person’s memory as the information may be guessed. Unit 5 - slide 13

Vary questions asked to maintain interest. Opening questions should be easy to get people started. More complex questions should be kept nearer the end. The closing questions should identify the respondent by age, income etc. Questions should follow a logical order – questions on same topic should be grouped together. Use terms that mean the same to all people (often can mean once a day to some people but once a month to others) Vary questions asked to maintain interest. Test the questionnaire before use. Unit 5 - slide 13

Interview Advantages Used when questions need to be more detailed. Uses a trained interviewer. Interviewer can explain complex questions, encourage answers and ask follow up questions Allows for more detailed responses rather than one or two word responses. Unit 5 - slide 13

Interviewing Disadvantages Time-consuming Expensive Poor interviewers may influence the answers given. Unit 5 - slide 13

Ways in which interviewing can take place. Personal interviews Face-to-face in the street In an office At home Phone interviews Providing the respondent is willing Unit 5 - slide 13

Other Methods Consumer Panel – small groups of consumers brought together to get their views on a number of new products. Hall Test – larger number of consumers are asked to comment on a range of products. E.g. major film releases are shown first to a test audience who will then discuss what they thought. Film makers may then decide to reshoot or change some scenes. Unit 5 - slide 13

Secondary Data/Desk Research Unit 5 - slide 13

Desk Research Cheaper and Easier to obtain. Information is usually historic and collected for another purpose. Available to competitors. It may not be accurate Unit 5 - slide 13

Methods Loyalty cards contain information on the customer and shows what spending patterns they have. Bar codes and electronic check-outs keeps track of what is being purchased in different parts of the country. Internet. Unit 5 - slide 13