Unit 4.4 - Market Research

Learning Points:

• Market Research

• Reasons for Market Research

• Market research process

• Types of Market research

  • Primary research

  • Secondary research

  • Qualitative research

  • Quantitative research

  • Sampling

  • Random sampling

  • Stratified sampling

  • Cluster sampling

  • Quota sampling

  • Snowball sampling

  • Convenience sampling

Concerned with finding out whether consumers will buy a product or service, and is done by analyzing consumer reactions.

• Reduce the risks associated with new product launches

• Predict future demand changes

• Explain patterns in sales of existing products and market trends

• Assess the most favored designs, flavors, styles, promotions for a product

• Identify consumer needs and tastes.

• Primary and secondary research into consumer needs and competitors.

• Product idea and packaging designs.

• Testing product and packaging with consumer groups.

• Brand positioning and advertising testing

  • Pre-testing of the product image and advertisement.

• Product launch and after the launch period.

  • Monitoring of sales and consumer response

• Gathering data or feedback first-hand, through:

  • Questionnaires (short and focused, allows open-ended questions)

  • Observation (foot traffic, queuing time)

  • Sampling (new product or campaigns)

  • Focus groups (asking groups of people)

  • Interviews

• Advantages

  • Up to date

  • More relevant/direct

  • Confidential and unique

  • Objective

• Disadvantages

  • Time-consuming

  • Costly

  • Questionable validity

Secondary research should be undertaken first because it is cheap, fast, comes with plenty of sources and offers a wide range of information.

• Advantages

  • Cheaper and faster

  •  Range of sources

  • Insight to trends

• Disadvantages

  •  May become obsolete or out of date quickly

  • Maybe in an inappropriate format

  • Partial information

  • Widely available to competitors

Qualitative vs. Quantitative Research

• Qualitative research

  • Used to get feedback and to understand motivation, behavior, perception through focus groups, expert panels, in-depth interviews of credible individuals.

  • Qualitative explores attitudes and opinions and can be very deeply relevant even if only a few are interviewed.

  • It can only give an indication and does not have statistical relevance.

  • Relatively inexpensive but harder to analyze, more time consuming, and results are subject to bias or skill of the interviewer.

• Quantitative research

  • Used to get statistical data from the total (for figures) or representative sample (for opinion, decisions), using interviews that have closed questions or use ranking or sliding scales.

  • Quantitative can only ask factual answers but may not reveal reasons why.

  • A larger representative sample is needed and must be designed well so it ends up more costly to undertake.

• Consumer surveys ask consumers for their opinions and preferences.

• It can obtain both qualitative and quantitative information

  • How many.....

  • What do you look for...

• 4 points of consideration when making surveys

  • What to ask?

    • Questions are unbiased and unambiguous

  • How to ask?

    • Should the survey be self-completed or filled in by an interviewer?

  • How accurate is it?

    • Accurate and valid

  • Who to ask?

    • It is impossible to ask everybody even if it is just potential members of a target market

    • A sample reflects the characteristics of the survey population

    • The sample should be significant and valid to avoid sample error

Sampling methods

• Random sampling

  • Random selection, based on the principle that everyone is given an equal chance.

• Stratified sampling

  • Segmentation with the number of respondents per group based on proportion to the population.

  • Majority of the population will comprise of the majority of the survey.

• Cluster sampling

  • Used for localized surveys (e.g. towns, region, etc.).

  • Sample-based on a geographic location/ concentration of the target.

• Quota sampling

  • A certain number or quota is set, made up of samples from each segment or random.

• Snowball sampling

  • Respondents are networked from a respondent’s referral.

• Convenience sampling

  • Respondents are chosen based on accessibility and proximity.