2-MARKET-RESEARCH G11.pptx

Internationa l Edexcel International A Level Business 131 Meeting customer needs 2 Market Research Revisionstation  Unit 1 Retrieval Challenge Matrix 1 point 2 points 3 points Define the term Compare mass and Explain what a ‘market size’...

Internationa l Edexcel International A Level Business 131 Meeting customer needs 2 Market Research Revisionstation  Unit 1 Retrieval Challenge Matrix 1 point 2 points 3 points Define the term Compare mass and Explain what a ‘market size’ niche markets dynamic market is Give an example of Compare market Explain how a ‘market share’ size and market competition share affects the market What is a ‘brand’? Discuss, using Explain the examples, online difference in retailing business between risk and uncertainty From Edexcel a) Primary and secondary market c) Methods of secondary market research data (quantitative and research: qualitative) used to: websites/social media identify and anticipate customer needs and wants newspapers/magazines/TV/radio quantify likely demand reports gain insight into consumer behaviour. databases. b) Methods of primary market research: d) Sampling methods: surveys/questionnaires focus groups/consumer panels random face-to-face/telephone interviews quota product trials/test marketing. stratified Starter Have you ever asked friends and family their opinion about something before you bought it? Who did you ask? What advice did they give you? Definition: Market Research The process of collecting data from consumers can be used by a business to identify marketing opportunities and develop marketing strategies This can take two forms (and you will need to know both) 1) Primary Market Research 2) Secondary Market Research Primary and secondary market research data Effective market research will help a business to:  Understand consumer  Quantify behaviour e.g. potential Reduce Dominos Pizza consumer risk found that they demand for a sell more product products when its (forecast sales) raining  Understand how much  Identify consumers will potential pay for a competitors product (strategy) (pricing) Benefits to a business of researching their market Market research aids effective business decision-making, reduces risks and reduces the costs of making poor decisions To develop a marketing plan based on data gathered about the marketing mix – the 4Ps (e.g. where is the best place to sell to reach the target audience) To help the business to react to and prepare for changes in the market Have a look at the 50 most wanted products What is Qualitative data? Seeks to gather and explore feelings and thoughts about “We loved it” a product from consumers Information gathered by; “It really worked for my family” “I found it easy to A. Focus group discussions use once I had read the manual” B. Interview consumers on “We liked the what they “think” about the design and showed it to our friends” “I was really product or service pleased with the C. Observations of buyer customer service behaviour (e.g. only family in the shop” groups bought the squash) Qualitative information Qualitative research can be used to discover consumers’ motivations, needs, reactions to an advert, reactions to new products or to come up with new ideas Qualitative data consists of the feelings, opinions and complaints of customers Why would complaints data be useful to a company? What is Quantitative data? Quantitative data involves gathering data and measuring responses Data displayed in charts and graphs, such as statistics and percentages Questionnaires are written to gather numerical data e.g. the number of respondents who used the Nike website last month but did not like the checkout system Quantitative information Examples of quantitative research may include: A. questionnaires with closed questions B. online surveys C. telephone, on-street or postal surveys Quantitative research is statistical in nature so it is important to use a large enough sample size so the results are meaningful This type of research is useful for discovering trends relating to consumer preferences, feelings of importance and satisfaction, and patterns in behaviour Methods of primary market research Definition: Primary market research Primary research is research the business conduct for themselves (or hire someone to do for them.) It involves going directly to a source – usually customers and prospective customers in the target market – to ask questions and gather information This means new data is gathered for the benefit of the business This data will be specific to the needs of the business What is a primary research? Primary research is new / original data gathered by the researcher The information does not yet exist, so it could not be found on the Internet, the business website or anywhere else This is brand new data which the business will gather about their product or service They will use this data to make specific decisions about the business; perhaps a new product Primary research – asking a or a new market customer’s opinion, have you ever participated in a survey or questionnaire? Primary research methods introduction There are lots of methods of primary market research these are the 4 that the exam board would like you to be able to discuss in an exam: 1. surveys/questionnaires 2. focus groups/consumer panels 3. face-to-face/telephone interviews 4. product trials/test marketing. #1 Primary research – questionnaire / survey Primary research may also include a survey of customers who use the business A questionnaire is a form to gather data from customers A business can gather quantitative (numbers) and qualitative data in this method It can also be used to measure customer satisfaction – giving the business a clear idea of where to improve What questions could a hotel ask their guests, to improve their customer service? How would this link to Trip Advisor and Twitter? #2 Primary research – face-to-face / telephone interview A primary research team may carry out interviews, these can be face-to- face or could be over the phone This could measure reactions to new ideas that the business has or to judge how good customer service was This is a good way to gather qualitative data e.g. opinions of customers As it is primary research this will be very specific to the needs of the business, and could be very expensive #3 Primary research - product trials / test marketing A business may invent or produce a new product or service All staff in the business may agree that these are good products or services, but they need to know if the wider public will buy them in the quantity they need to break Often one location will be given product even and make a profit version A And another location will get product Therefore the product is offered to version B a carefully chosen sample, and based on the sample’s reactions Comparisons and conclusions can then the product will either be launched be made as to which version should be full scale or scrapped.* launched across the country #4 Primary research – focus group / consumer panel A group of target market demographic respondents are chosen to take part in a product trial They may use the product over time and then get together in a group to discuss their thoughts about the product This gives the business very specific qualitative information about how customers relate and “feel” about the product What is the difference between a focus group and a consumer panel? On the spot How might market research reduce the risk in business? On the spot State 3 advantages of primary research Methods of secondary market research Definition: Secondary research Secondary research is gathering data which already exists It is also known as desk research Secondary research methods introduction There are lots of methods of secondary market research these are the 4 that the exam board would like you to be able to discuss in an exam: 1. Databases 2. Reports 3. Websites/social media 4. Newspapers/magazines/TV/radio #1 Secondary Research: Databases Large supermarkets use all the data from their loyalty schemes to build huge customer databases This information can be used to target customers likely to buy at the store e.g. customer satisfaction with bakery products at Morrison's What information does Experian gather? #2 Secondary research: Reports Marketing departments of Mintel trends and reports – Mintel smaller companies may have has a global team of trend analysts smaller budgets constantly assessing change in Buying a report about an culture, economy and society. industry may be the most cost- Reports cost £1,000 - £3,000 effective way for them to Have a look through their site at achieve their marketing the samples objectives #3 Secondary research: Websites Pop-ups on websites can be used to ask customers about products they have bought or may buy These may also be used to gather e-mail addresses so that targeted customers can be surveyed later via e-mail Some sites have lots of useful quantitative data about the industry #3 Secondary Research: Social networks (Twitter) Twitter can be used to support marketing research – by searching for trending hashtags to see emerging trends It can also search a business name or a brand name to find out quantitative information about customer perceptions See today’s twitter cloud here are you surprised at any of the trending terms for today?  #3 Secondary research: Websites / social media The Internet is an ideal way to research competitor websites, articles, publications, annual accounts etc. The Internet is a useful method of quickly gaining industry information Social networks, blogs, and other forms of social media have emerged as forums where consumers discuss their likes and dislikes, and customers can be particularly vocal about companies and products you have an ‘Alexa’ (or similar) and what do you use it for? #4 Secondary research: Newspapers / Magazines / TV / Radio Local newspapers, journals, magazines, and radio and TV stations are some of the most useful commercial information outlets They are useful because they contain demographic profiles of their audiences (their income, age, gender, amount of disposable income, and types of products and services purchased, what they read, and so on) They can also have information about economic trends in their local areas that could be significant to the business Sampling methods Definition: Sampling The act, process or technique of selecting a suitable sample of the population for the purposes of carrying out market research Sampling Sampling is the process of choosing the right people to be part of the research What kinds of respondents would Whiskers the cat food manufacturer want to answer their surveys in terms of: a. Age b. Lifestyle c. Gender d. Location Sampling methods introduction There are lots of methods of sampling, your exam board would like you to know three main types: 1.Random sampling 2.Quota sampling 3.Stratified sampling #1 Random sampling Random sampling in market research is regarded as the perfect method Everyone in the population has an equal chance of being chosen For example 25 employees’ names are drawn from a hat out of a total of 300 employees, these may then be asked questions about the workplace Watch the video, can you now explain random sampling to someone else? #2 Quota sampling Quota sampling in market research is when certain number of a type of person is chosen by selection rather than being chosen by chance This is a very quick and easy method so is very popular with market research agencies For example a business may ask for the agency to interview 200 people aged between 18 and 35 #3 Stratified sampling Stratified sampling in market research occurs when the population is divided into smaller groups – which are more likely to be interested in the product being researched For example if 50% of the total population are male then the sample should ask half men and half women. This will depend on the product of course, some are gender specific. Plenary Quiz Identify the correct word to put in the gaps: 1. A pizza restaurant designs new flavours based on ingredients they have to hand, this is __________ orientation 2. A pizza restaurant designs new flavours based on a survey that they gave customers, this is _______________ orientation 3. A pizza restaurant looks online at the menu that their closest competitor has on their website, this is __________ research 4. A pizza restaurant gives customers a survey to fill out while waiting for their pizza, this is ________________ research Plenary Quiz Answers Identify the correct word to put in the gaps: 1. A pizza restaurant designs new flavours based on ingredients they have to hand, this is product orientation 2. A pizza restaurant designs new flavours based on a survey that they gave customers, this is market orientation 3. A pizza restaurant looks online at the menu that their closest competitor has on their website, this is secondary research 4. A pizza restaurant gives customers a survey to fill out while waiting for their pizza, this is primary research Glossary Quantitative data; data gathered that is numerical such as % of customers who buy more than once a week Qualitative data; non numerical data such as how customers use the product Product orientation; to sell products and services that the business wants to produce Market orientation; to sell products or services based on customer needs and wants Primary market research; data which is collected first hand Secondary market research; data which already exists Market segmentation; a whole market can be divided into sections called segments