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4.4:Market Research

Why and how organisations carry out market research

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  • Market research is the process of gathering information about customers, competitors, and market trends. It helps businesses identify and anticipate customer needs, improve marketing strategies, test new products, and make informed decisions.

  • Types of Market Research:

  • Ad hoc: Conducted on a one-time basis to address specific marketing problems.

  • Continuous: Conducted regularly to track changes in customer preferences and market trends.

  • Purpose of Market Research:

  • Gain up-to-date information: Stay informed about industry changes and customer preferences.

  • Improve marketing strategies: Tailor marketing mix for different market segments.

  • Test new products: Assess customer reactions to new product ideas.

  • Analyze competitors: Understand competitor activities and strategies.

  • Predict future trends: Anticipate market changes and opportunities.

  • Benefits of Market Research:

  • Reduces risks of failure by understanding customer needs and preferences.

  • Helps businesses make informed decisions about product development, marketing, and pricing.

  • Provides valuable insights for strategic planning and decision-making.

Primary Research

  • Primary market research involves collecting new, first-hand data for a specific purpose. It's often used to gather information directly from customers about their buying patterns and market preferences.

  • Advantages of Primary Research:

  • Relevance: Directly addresses specific research questions.

  • Up-to-date: Provides current and reliable data.

  • Confidential and unique: Data is exclusive to the organization conducting the research.

  • Disadvantages of Primary Research:

  • Time-consuming: Collecting accurate and representative data can be lengthy.

  • Costly: Conducting primary research can be expensive.

  • Validity: Flaws in research design or execution can lead to biased or misleading results.

Methods of Primary Research

  • Surveys:

  • Self-completed surveys: Distributed to individuals for completion.

  • Personal surveys: Conducted face-to-face by interviewers.

  • Telephone surveys: Conducted over the phone.

  • Advantages of Surveys:

  • Can collect quantitative and qualitative data.

  • Relatively easy to administer and analyze.

  • Cost-effective compared to some other methods.

  • Disadvantages of Surveys:

  • Potential for bias in question wording or respondent answers.

  • Time-consuming to design, distribute, and analyze.

  • May have low response rates, especially for postal surveys.

  • Interviews:

  • One-on-one conversations with individuals to gather detailed information.

  • Can be conducted in person, over the phone, or online.

  • Can explore beliefs, attitudes, and feelings in depth.

  • Advantages of Interviews:

  • Allows for detailed exploration of topics.

  • Can capture non-verbal cues and body language.

  • Can be tailored to individual respondents.

  • Disadvantages of Interviews:

  • Time-consuming to conduct and analyze.

  • Potential for interviewer bias to influence responses.

  • May be difficult to generalize findings from individual interviews.

Methods of Primary Research Part 2

  • Focus Groups:

  • Small group discussions with participants who share similar characteristics.

  • Used to explore opinions, attitudes, and behaviors.

  • Often used for new product development or testing.

  • Advantages of Focus Groups:

  • Generates rich and detailed information.

  • Allows for interaction and discussion among participants.

  • Can provide insights into group dynamics and behaviors.

  • Disadvantages of Focus Groups:

  • Can be dominated by certain individuals, limiting the participation of others.

  • May be difficult to generalize findings to the entire population.

  • Can be expensive to conduct and analyze.

  • Observations:

  • Watching how people behave in different situations.

  • Can be conducted in controlled settings or in natural environments.

  • Used to measure behavior and gather quantitative data.

  • Advantages of Observations:

  • Captures actual behavior rather than self-reported data.

  • Can provide insights into unconscious or unspoken behaviors.

  • Can be used to measure specific behaviors or time spent on tasks.

  • Disadvantages of Observations:

  • May not reveal the underlying reasons for behavior.

  • Can be time-consuming and resource-intensive.

  • May raise ethical concerns about privacy and consen

Secondary Research

  • Secondary market research involves collecting existing data and information gathered by others. This makes it a faster and cheaper option compared to primary research.

  • Advantages of Secondary Research:

  • Cost-effective: Cheaper and faster to collect and analyze than primary research.

  • Industry insights: Provides trends and changes within the industry.

  • Accessibility: Wide range of sources readily available, especially online.

  • Statistical validity: Findings are often based on large samples and thorough research.

  • Internal and external sources: Data can come from within the company (sales records) or from external sources (market reports, government publications).

  • Disadvantages of Secondary Research:

  • Outdated information: Data might be outdated or irrelevant to current needs.

  • Inappropriate format: Data may not be formatted for the specific research question.

  • Incomplete information: May not address all the research questions.

  • Accessibility to competitors: Information is readily available to competitors as well.

Methods of Secondary Research

  • Summary of Secondary Market Research Sources

  • Secondary market research involves collecting existing data and information from various sources. It's a cost-effective and time-saving alternative to primary research.

  • Types of Secondary Sources:

  • Market Analyses: Provide insights on market size, trends, growth rates, and competitor performance.

  • Advantages: Up-to-date, detailed data and forecasts.

  • Disadvantages: Can be expensive, data might be outdated.

  • Examples: Market research firms (Nielsen, Mintel), competitor reports.

  • Academic Journals: Publish research findings by scholars and experts.

  • Advantages: Rigorous research, reliable source, often free access.

  • Disadvantages: Information may not be relevant or current, findings can be debatable, access fees for some journals.

  • Examples: Harvard Business Review, IB Review.

  • Government Publications: Offer comprehensive data on demographics, economics, and social trends.

  • Advantages: Reliable, up-to-date, often free, wide range of topics.

  • Disadvantages: Difficult to locate specific information, fees for detailed data.

  • Examples: Government websites (UK: www.statistics.gov.uk, US: Y:Ei:E.i...usa.gov).

  • Media Articles: Provide current information and insights from various publications.

  • Advantages: Up-to-date information, often free access.

  • Disadvantages: Potential bias, can become outdated quickly, subscription fees for some articles.

  • Examples: Newspapers (Financial Times), business magazines (The Economist).

  • Online Resources:

  • The internet offers a wealth of secondary market research data, including:

  • Online versions of the sources mentioned above.

  • Search engines (Google) and online encyclopedias (Wikipedia).

  • Company websites, biographies, and social media forums.

  • Online documentaries and educational videos.

  • Advantages of Online Sources:

  • Accessibility: Available 24/7, vast amount of information.

  • Cost-effectiveness: Many resources are free or require minimal fees.

  • Multimedia: Provides information in various formats (text, audio, video).

  • Disadvantages of Online Sources:

  • Information overload: Difficulty finding relevant and reliable information.

  • Data quality: May not be as rigorous as academic sources or official publications.

  • Subscription fees: Some online resources require paid subscriptions.

Qualitative vs Quantitative

  • Qualitative market research focuses on collecting non-numerical data to understand customer behaviors, attitudes, and perceptions. It's often used to gather in-depth insights and opinions through methods like interviews and focus groups.

  • Advantages of Qualitative Research:

  • Understanding motivations: Reveals underlying reasons for behaviors and attitudes.

  • Flexibility: Allows for exploration of unexpected topics and insights.

  • Cost-effective: Can be less expensive than quantitative research with smaller sample sizes.

  • Individual perspectives: Provides detailed information from individual respondents.

  • Disadvantages of Qualitative Research:

  • Limited generalizability: Findings may not represent the entire population due to small sample size.

  • Time-consuming: Analysis can be lengthy and complex.

  • Interviewer bias: Researcher's influence can affect respondent answers.

  • Cost: Hiring skilled interviewers can be expensive.

Sampling Methods

  • Sampling is the process of selecting a smaller group (sample) from a larger population for market research purposes.

  • Types of Sampling:

  • Quota Sampling: Selecting a specific number of individuals from different market segments based on predetermined quotas.

  • Advantages: Quick and can provide a representative sample.

  • Disadvantages: May not be truly representative, sampling errors possible.

  • Random Sampling: Giving everyone in the population an equal chance of being selected.

  • Advantages: Representative sample, minimizes bias.

  • Disadvantages: Time-consuming and expensive, may not include all relevant segments.

  • Convenience Sampling: Selecting individuals who are readily available or easy to reach.

  • Advantages: Easy and quick to conduct.

  • Disadvantages: Biased sample, may not represent the entire population.

  • Choosing a Sampling Method:

  • The best sampling method depends on:

  • Who needs to be asked: Identify the target population.

  • What needs to be asked: Determine the specific information required.

  • Cost and time constraints: Consider the budget and timeline for the research.

  • Sample size: Ensure a large enough sample for representative findings.

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