2.1 Conducting Market Research with Limited Budgets 2 M ARKETING 2.1 M ARKET R ESEARCH Can you identify 3 types of market research? EQUATES IN IRON VERY US CUPS FOUR GO New Topic

2.1 C ONDUCTING M ARKET R ESEARCH WITH L IMITED B UDGETS  In this topic you will learn about  Reasons for conducting market research  Market research methods 2.1 M ARKET R ESEARCH If you were planning to open a clothes shop in your local area what information would you want to know before making important decisions?

M ARKET R ESEARCH  What is marketing?  The identification, satisfying and revisiting of customer needs  Covers a number of activities including researching the market before deciding on product, price, place and promotion (all of which are covered in the next presentation)  What is market research?  Market research is the collection and analysis of data and information to inform a business about its market. This could include: Customers Competitors Market place 2.1 M ARKET R ESEARCH

R EASONS FOR C ONDUCTING M ARKET R ESEARCH Start-up market research Part of Business Plan Helps assess feasibility Identifies potential demand Informs sales forecasting Lack of experience 2.1 M ARKET R ESEARCH Recap 1.3 What is a business plan? Why would market research be included in a business plan?

R EASONS FOR CONDUCTING MARKET RESEARCH 2.1 M ARKET R ESEARCH Jasmine is a designer of unique silver and pewter rings for both men and women. Her friends and family love her designs and believe that she could become known as a top designer. Jasmine’s Mum has offered to help her set up a small shop in their home town of Bournemouth. Her Dad thinks that this is a good idea. However, he is concerned about the number of new shops that open and close shortly afterwards due to lack of demand. He suggests that Jasmine should carry out some market research before opening the shop. Question time 1.What is meant by ‘market research’? (2 marks) 2.Explain 2 reasons why Jasmine should carry out market research before opening her shop. (4 marks) 3.Explain 1 reason why Jasmine should look at her competitors in the market. (2 marks)

2.1 M ARKET R ESEARCH M ETHODS OF MARKET RESEARCH ON A LIMITED BUDGET  There are two categories of market research:  Primary market research (field research) involves the collection of first hand data that did not exist before. Therefore it is original data.  Secondary market research (desk research) is research that has already been undertaken by another organisation and therefore already exists. Discussion point What is a budget? Why is the budget likely to be limited? What are the costs involved with market research?

M ETHODS OF MARKET RESEARCH ON A LIMITED BUDGET Market ResearchPrimarySecondary Advantages specific to your needs up to date can be cheap already exists may be compiled by experts quick to access Disadvantages lack of expertise time consuming results may be limited can be out of date often expensive not specific to you 2.1 M ARKET R ESEARCH Would you take part in market research on lip balm?

2.1 M ARKET R ESEARCH M ETHODS OF MARKET RESEARCH ON A LIMITED BUDGET Telephone and other Surveys A survey is a set of predetermined questions to be answered by the respondent. Normally questions are short and closed. Often provides respondents with options to choose from. Surveys can be: Postal Telephone Face–to-face On-line Questionnaires A questionnaire, like a survey, is a set of predetermined questions to be answered by the respondent. May include open and closed questions, but primarily closed. A relatively easy way to collect consumer opinions. Have you ever taken part in a survey? What type of survey was it? What was the purpose of the survey? How do you respond when someone approaches you in the street or rings you up asking you to take part in a survey?

2.1 M ARKET R ESEARCH M ETHODS OF MARKET RESEARCH ON A LIMITED BUDGET Customer/supplier feedback Listening to the views and opinions of 2 important stakeholders. Suppliers may have knowledge of trends in the market. Responding to customers wants and expectations. Focus Groups Groups of consumers who share their views and opinions in a focussed discussion. Provides qualitative data. Allows for follow up questions. Often when a customer returns from a holiday the tour operator will question them about their experience on topics such as checking in, cleanliness, food, value for money etc. What are the advantages to the tour operator of doing this? Why might a business choose to run a focus group rather than a survey to collect consumer opinions?

2.1 M ARKET R ESEARCH M ETHODS OF MARKET RESEARCH ON A LIMITED BUDGET Internet Research Using information that already has been collected and is available on the internet. Wide range of information freely available. Can carry out research independently. Examples of internet research: Visit these sites to identify the type of information available. Explain how a business looking to set up in your area might use this information. How much do we really understand about the internet?

S AY WHAT YOU SEE 2.1 M ARKET R ESEARCH Just collecting market research is not enough, it is the interpretation and analysis that is important.

M ARKET R ESEARCH 2.1 M ARKET R ESEARCH Jasmine has decided to take her Dad’s advice and carry out some market research. She spoke to her Dad in more detail and he suggested she used secondary market research due to her limited budget. However, Jasmine is also keen to speak to potential customers to find out their views on her designs, location and pricing. Question time 1 What is meant by ‘secondary research’? (2 marks) 2 Explain 2 benefits to Jasmine of using secondary market research. (4 marks) 3 Suggest a suitable market research method for Jasmine to find out about consumers’ opinions. Justify your answer. (6 marks)

M ARKET R ESEARCH Research MethodAdvantagesDisadvantages Telephone survey Face to face survey Postal survey On line survey Supplier feedback Focus group Questionnaire Customer feedback Internet Research 2.1 M ARKET R ESEARCH Work in pairs to complete the table below.

5 M INUTE T EST  Define marketing  Distinguish between primary and secondary market research  What is a focus group?  State 1 advantage and 1 disadvantage of primary market research  State 1 advantage and 1 disadvantage of secondary market research  What is the key factor limiting the amount and type of research a new business can conduct? End