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    Chapter 17 Market Research

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    Vincent Churchill
    Market research is important for businesses to understand customer wants and needs before producing products. There are two main types of market research: primary research involves directly gathering new data through surveys, interviews, or experiments; secondary research analyzes already existing data from sources like government reports or trade journals. Both qualitative and quantitative data can be collected through market research to help businesses make better decisions around product features, pricing, marketing, and competition. Small businesses often rely more on lower-cost secondary research, while larger companies may hire outside agencies to perform in-depth primary research.

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    Chapter 17 Market Research

    Uploaded by

    Vincent Churchill
    52 views6 pages
    Market research is important for businesses to understand customer wants and needs before producing products. There are two main types of market research: primary research involves directly gathering new data through surveys, interviews, or experiments; secondary research analyzes already existing data from sources like government reports or trade journals. Both qualitative and quantitative data can be collected through market research to help businesses make better decisions around product features, pricing, marketing, and competition. Small businesses often rely more on lower-cost secondary research, while larger companies may hire outside agencies to perform in-depth primary research.

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    Market research is important for businesses to understand customer wants and needs before producing products. There are two main types of market research: primary research involves directly gathering new data through surveys, interviews, or experiments; secondary research analyzes already existing data from sources like government reports or trade journals. Both qualitative and quantitative data can be collected through market research to help businesses make better decisions around product features, pricing, marketing, and competition. Small businesses often rely more on lower-cost secondary research, while larger companies may hire outside agencies to perform in-depth primary research.

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    © All Rights Reserved
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    52 views6 pages

    Chapter 17 Market Research

    Uploaded by

    Vincent Churchill
    Market research is important for businesses to understand customer wants and needs before producing products. There are two main types of market research: primary research involves directly gathering new data through surveys, interviews, or experiments; secondary research analyzes already existing data from sources like government reports or trade journals. Both qualitative and quantitative data can be collected through market research to help businesses make better decisions around product features, pricing, marketing, and competition. Small businesses often rely more on lower-cost secondary research, while larger companies may hire outside agencies to perform in-depth primary research.

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    Chapter 17: Market research

    igbusinesss.blogspot.com/2011/04/chapter-17-market-research.html

    Why is market research needed?

    Any business should find out what people want to buy and how many people are going to buy that product before
    producing a product since the chances of failing are very high. Usually, market research try to answer these
    questions:

    What feature of the product do they like/dislike?


    Are people willing to buy the product?
    What price are people prepared to pay?
    Location of the selling point of the product.
    Type
    of customer who buys the product.
    Type of promotion that will be effective.
    Competition in the same industry.

    Businesses need to know these things as well as consumer wants to be more competitive. There are two main
    types of information that can be gathered from market research:

    Qualitative information: information where opinion or judgement is necessary.


    Quantitative information: information about the quantity of something.

    There are two ways to gather any information for market research:

    Primary research or field research.


    Secondary research or desk research.

    Primary research

    Primary research is gathering original data which may require direct contact with customers. There are
    several ways to do primary research:

    Questionnaires
    Interviews
    Consumer panels

    1/6
    Observation
    Experiments

    Note: Questionnaires, interviews and consumer panels are all types of surveys.

    The process of primary research

    1. Identify the purpose of the market research.


    2. Decide on the best method of research. (primary, secondary or both)
    3. Decide on the size and type of sample (group of people who will be asked)
    4. Carry out the research.
    5. Collate data and analyse results.
    6. Produce a report. (may include recommendations of action paths to take)

    Methods of primary research

    Questionnaires

    Questionnaires involve asking people questions. Deciding what questions to ask since sometimes questions
    may mislead people and make them answer what they don't really think.

    Pros:

    Detailed qualitative information can be gathered.


    Customers' opinions can be gathered.

    Cons:

    If the questions are bad it could mislead customers.


    Takes time and money to collate the results.

    Interviews

    Interviews are face-to-face conversations with customers where the interviewer has a set of prepared
    questions.

    Pros:

    The interviewer can explain any questions the interviewee does not understand.
    Detailed information about customers' opinions.

    Cons:

    Interviewer bias. The interviewer might unconsciously lead the interviewee to answer in a certain way.
    Time consuming and expensive.

    2/6
    Samples

    A group of people who are chosen to do market research on. There could be:

    Random sample: A random number of people are selected.


    Quota sample: People are selected for some certain characteristics.

    Consumer panels

    Consumer panels are groups of people who agree to provide information and spending
    patterns about a product. They may even test it and give feedback on likes and dislikes.

    Pros:

    They provide detailed information about a product.

    Cons:

    They can be time consuming, expensive, and biased if opinions of some is influenced by others.

    Observation

    Observation involves:

    Recording: e.g. meters can be fitted to a monitor to see what people are watching.
    Watching: e.g. see how many people go into a shop and actually buy something.
    Audits: e.g. counting inventory to see what has sold well. (inspecting)

    Pros:

    It is inexpensive.

    Cons:

    Only provide basic figures and not reasons why people do things.

    Experiments

    Experimenting involves giving products to consumers to see what they think about it.

    Pros:

    Easy to set up, carry out, and gather consumer opinions.

    Cons:

    3/6
    People might give wrong feelings to avoid offence.
    Representatives of samples may not be asked, just people who shop in an area.
    Many potential customers may not be asked.

    Secondary research

    Secondary research means taking information that has been already collected by others.

    Internal sources of information

    Data collected from past researches could easily be used again if it is needed. Examples of internal sources of
    information include:

    Sales
    department: sales records, pricing data, customer records, sales records.
    Distribution and PR personnel.
    Finance department.
    Customer service department.

    External sources of information

    Data collected from sources outside the business. The data may still be useful but there are many limitations
    since it has been gathered for other purposes. Sources include:

    Internet: gives all sorts of information, but the info must be validated.
    Trade and employer associations: gives info about things in an industry.
    Specialist journals.
    Research reports.
    Newspapers: about the economy and disposable income of workers.
    Government reports and statistics: contains things such as age groups and culture.
    Media reports.
    Market research agencies' reports: detailed reports on the economy. Expensive to buy.

    Secondary research is often a much cheaper way of obtaining information. It also gains access to data which
    cannot be gathered by primary research such as government issues or the economy.

    Who carries out market research?

    Normally, research is done by any business who needs it. In smaller businesses, owners use secondary
    research since they cannot afford to conduct primary research. However, if a business has enough money, it can
    afford to have a specialist market research agency to do the research for it.

    Accuracy of market research information

    The accuracy of market research depends on how the research was conducted and how carefully samples
    have been selected. Here are some ways to make information from market research more accurate:

    4/6
    A sample needs to be truly representative of the total population, hence a quota sample is normally
    used.
    The larger the sample, the more accurate the results.
    Questionnaires need to be tested on a small group of people to see if there are misinterpretations. The
    questionnaires will be modified to be as clear as possible.

    Concerning secondary research, there are a few problems with it:

    Data collected by others may not be accurate since it was used for other purposes.
    Data can be out of date.

    All in all, it must never be assumed that information collected from market research is completely correct.

    How to design and use a questionnaire

    Firstly, you need to ask yourself some questions:

    What do I need to find


    out?
    Who do I need to ask?
    Where will I carry out my questionnaire?

    Writing the questions

    Ask no more than 12 questions. (impatience)


    Make the questions simple. The answers should be simple enough to collate. (e.g. Yes/No answers)
    Use choice of age groups.
    Avoid open-ended questions.
    Avoid misleading the interviewee with questions. (don't want to cause offence)
    The order of the questions should be logical.

    Carrying out the questionnaire

    First you need to figure out:

    How you will ask the questions.


    How you will collate the results.

    Then:

    Where are you going to ask the questions.


    Who are you going to ask?

    And finally:

    5/6
    How many people will be asked?
    When will you ask the questions? (time)

    Analysing questionnaires

    Analysing the results should be straightforward if you have easily collated the data. It simply involves reading the
    answers and thinking about what they mean. It takes practice, so open your books to pages 271 and 271 and
    let's do the case studies!

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    6/6

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