1. HL2 MARKETING THEORY: QUANTITATIVE MARKET RESEARCH IB BUSINESS & MANAGEMENT A COURSE COMPANION

2. INTRODUCTION TO QUANTITATIVE MARKET RESEARCH Quantitative market research aims to collect large amounts of data that can be analyzed to identify trends. Surveys often ask long lists of pre-set questions with a limited choice of answers. These are fed into a computer for statistical analysis of the results. Given that it is impossible to survey the whole population, quantitative market research is usually based on a representative sample.

3. Different methods of conducting a Sample Survey:  Random Sample  Stratified Sample  Cluster Sample  Snowball Sample

4. RANDOM SAMPLE Trying to get a sample of a cross section of society. This is harder than it sounds, as the time and place that you carry out your survey will have a huge effect on who takes part. Eg: Doing your survey at 10am, will rule out the majority of those people who are in full-time work. As a result, random samples try to target people based on lists, such as one in every hundred names on the register of voters. The problem with this is that it takes time to contact those people and it is therefore an expensive method of sampling.

5. STRATIFIED SAMPLE Certain products are clearly targeted as certain groups. Eg: A company that makes electric shavers will only be interested in men who shave. As a result, women, children and bearded men can be ignored. Once you have identified your key characteristics, you could try randomly to pick people who meet these pre-conditions (this is know as selecting a stratified random sample)

6. CLUSTER SAMPLE This is a very specific survey. The is not commonly used by large businesses Small businesses based in a local area, (eg: restaurants, may want to focus their market research in a specific location. Surveys of local tastes and preferences would be of more use to them than a general survey based on the whole population.

7. SNOWBALL SAMPLE This involves using a group of targets to recruit future subjects for sampling. It is a very low cost method of sampling and links in well with technology such as social networking sites. It is of particular use when trying to get data from subjects who may not be keen to respond to more traditional methods, for example drug users or workers in the sex industry. However, because respondents are recruiting their friends, it is strongly subject to bias and results must be treated with caution.

8. QUANTITATIVE MARKET RESEARCH Irrespective of the method of sample chosen, it is important that the sample is big enough to be representative of the population chosen. The greater the sample, the more confidence a business can have that its results are reliable. If a company asks only 20 people their views on new package for its product, it may find that 15 of them like them. However, it would be a huge leap of faith to assume that this means that 75% of the population like the new design.

9. QUANTITATIVE MARKET RESEARCH Basing marketing decisions on a small sample runs the risk of getting key decisions on the marketing mix wrong, which can have disastrous effect on sales and profits. You would therefore assume that businesses run huge samples to be as sure as possible, but the key limiting factor is cost. The larger the sample, the more it costs the business to carry out the research. As a result, businesses must strike a balance between the cost and effectiveness of their research.

10. What are confidence levels with market research? Confidence levels are simply a statistical measure of how likely a sample result is to be true for the population as a whole. For example, a 90% confidence level means that nine times out of ten the findings of the survey will be accurate. Of course, this means that one in ten will be wrong, but businesses are usually happy to accept a confidence level of this magnitude, given that 100% confidence is impossible unless you survey everyone. Clearly the larger your sample, the more likely that the survey will give representative results, that is they will have a higher confidence level.

11. QUALITATIVE MARKET RESEARCH Qualitative market research looks in far more depth at the buying process. Instead of formulating pre-set questions and answers, researchers will aim to get a more detailed view of consumers behaviour by engaging in open-ended discussion and asking more general questions. It is important that discussions are carried out by professionals (usually psychologists) in order to be able to interpret findings fully.

12. QUALITATIVE MARKET RESEARCH Long interviews and sessions with discussion groups take a lot of time and the process is expensive. However, it is useful for businesses to understand the thought processes behind buying decisions as this can add value and ideas in a way that quantitative research cannot.

13. QUALITATIVE MARKET RESEARCH Bias For both quantitative and qualitative market research, there is always the danger of bias. Interviewers may consciously or subconsciously lead the person being interviewed in a certain direction. A dominant person in a group discussion may lead the other participants to that individuals point of view. The writer of a questionnaire may phrase questions in a way more likely to get one answer than another. As a result, it crucial for the reliability of the research that a thorough review of the process is carried out to minimize the chances of participants being unduly swayed towards one answer or another.

14. QUALITATIVE MARKET RESEARCH Technology Given the spread of the Internet in recent years, market research on a larger scale has come into the price range of many smaller businesses. It is relatively cheap and quick to send out an Internet Survey, but the above points must still be considered by the business if it is to get useful results. One of the key issues with Internet-based surveys is the low response rate that can get. Without incentives to tempt people to fill in the survey (eg: the change to win a prize) it is likely that only a small percentage of people will respond.

15. QUALITATIVE MARKET RESEARCH Technology A way that businesses have been trying to get around this problem is by using information that have about consumers to target research more effectively. Eg: Many supermarkets run loyalty card schemes that record each consumer’s purchases. If a supermarket wants to carry out a survey on ready meals, (eg: Through an email survey) it could target those customers who have previously bought pre-prepared products. In this way, it would focus on people whose opinions should be useful as they already have some knowledge of the product range. The company would more likely get a higher response rate as the people targeted would feel the survey is relevant to them.