Market Research Methods PDF

2.2 Market research methods Starter: What is the difference between Goods and services? What methods can a company use to research its customer's needs? Note these questions down ​ and watch the clip from Dragon’s Den Online business that delivers a selection of fine food, What goods/ s...

2.2 Market research methods Starter: What is the difference between Goods and services? What methods can a company use to research its customer's needs? Note these questions down ​ and watch the clip from Dragon’s Den Online business that delivers a selection of fine food, What goods/ services drinks and snacks direct to does Flavoury customers.offer? How did Flavoury Page on business website, research customer customers rate the products likes and their fooddislikes? preferences. What Numberissues of otherdid the investors. Dragons Ryan ownshave less thanwith 50% of the company. Flavourly? 2 Key elements to this topic Purpose Methods of of market market research research 3  Market research The purpose of market research is to gather information. ​ This will enable the business to be informed in its decisions and so reduce the risk of failure. 4 5 Purpose of Market Research Identify gaps in the market Identify Purpose and understan of Market Reduce d customer Researc risk needs h July 20XX Inform business decisions 6 Example question: Explain the purpose of marketing within ford motors (2 marks)​ The purpose of marketing is to identify gaps in the market for example they might find out there are no cars for elderly people and will design a car to meet their needs. 7 Useful insights provided by effective market research Market – Customers – Size, Who, needs, structure, wants, trends expectations Competitio Market n- Who, segments- Market Existing or new share, USP segments offering opportunities 8  Two key categories of market research Primary Secondary Research: Research: Data collected Data that first-hand for a already exists specific research that has been purpose​ collected for a different purpose 9 Benefits & drawbacks of primary & secondary research PRIMARY RESEARCH​ SECONDARY RESEARCH​ BENEFITS​ Directly focused to Often free and easy to obtain​ research objectives​ Kept private – not publicly Good source of market insights​ available​ More detailed insights – Quick to access and use​ particularly into customer views​ DRAWBACKS​ Time-consuming and costly to Can quickly become out of obtain​ date​ Risk of survey bias​ Not tailored to business needs​ 10 Sampling may not be Specialist reports are often  Methods of market research Intervie Websit Newspa Focus ws es per and group magazin es Intern Questionna al ires Market Research data Triallin Censu g s 11 Primary research methods – Questionnaires A questionnaire is a research instrument that consists of a set of questions (or other types of prompts) for the purpose of gathering information from respondents through survey or statistical study. Advantages: Can be done by post, telephone, face to face or online. Given to existing and potential customers.​ Relatively cheap and can produce good quality data, if the sample size is large enough.​ Data collected is usually quantitative and therefore easy to analyse. Disadvantages: Questions need to be well designed to ensure the information collected is reliable.​ Reply rates are often low, especially for telephone and postal methods. ​ Can be expensive and time consuming for a large sample to be obtained that truly represents the views of the general population. 12 Primary research methods – Interviews An interview is a structured conversation where one person asks questions, and another provides answers. Advantages: Can be done by telephone or face to face.​ Given to existing and potential customers.​ Interviewer can explain questions further if there is a misunderstanding.​ Allows targeting of specific customers to meet a particular profile. Disadvantages: Can be expensive and time consuming for a large sample to be obtained that truly represents the views of the general population.​ Customers may feel unhappy answering questions and rush responses to complete the interview. This may lead to inaccurate opinions/responses being given. 13 Primary research methods – Focus groups A focus groups is a small groups of people who represent the target market for a good or service. The group are given information and asked questions. Advantages: Good way of getting detailed information about customer tastes and preferences.​ They provide detailed information and opinions i.e. qualitative information. Disadvantages: Can be costly and time consuming to conduct and therefore need to be carefully managed.​ Only a small amount of data is collected which may not reflect the viewpoints of others fully. 14 2.2 Market research methods Continued Primary research methods – Trialling Trialling is the process of formally testing a product to discover how effective or suitable it is, Involves testing whether consumers will buy/use a good or service Advantages: Provides an opportunity for a business to trial a good or service on a small scale to assess potential demand. If the trial shows consumers do not like the good or service, the business can adapt or withdraw it. Disadvantages: Expensive to set up.​ Chosen area must represent target market for information to be useful and valid. 16 Secondary market research methods – Census Provides detailed insights on the economy and on many industry sectors. There is also population data published by the government based on the census. Advantages: Census data covers the entire population, providing a complete picture of demographic characteristics. This extensive coverage ensures that businesses have access to detailed and representative data. Census data is generally accurate and reliable since it is collected and verified by government agencies. Businesses can trust the validity of the information for making informed decisions. Disadvantages: Census data is collected at specific intervals (e.g., every ten years), meaning it can become outdated quickly. Businesses may not have access to the most current data for decision-making. While the data itself is often free, the cost of analysing and processing the extensive and complex data can be significant. Businesses may need to invest in specialised software or hire 17 experts. Secondary market research methods – Competitor websites Valuable information on marketing activities of competitors including their products, prices and promotional activities and materials. Advantages: By analysing competitor websites, businesses can benchmark their own products, services, and pricing strategies against those of their competitors, identifying areas for improvement. Competitor websites can reveal the latest industry trends, helping businesses stay current and adapt to changes in consumer preferences and market demands. Disadvantages: Information obtained from competitor websites may not provide a complete or accurate picture of the competitor's strategies and performance, leading to potentially misleading conclusions. Focusing too much on competitors can lead to reactive rather than proactive strategies, hindering innovation and the development of unique value propositions. 18 Secondary market research methods – Customer reviews The internet provides data from product users who give ratings and feedback about a particular product. In some cases, these are independent sites e.g. TripAdvisor, in other cases they are provided by the business itself e.g. Amazon.​ Advantages: Customer reviews provide genuine and direct feedback from actual users of the product or service. This authentic insight can highlight strengths and areas for improvement that might not be apparent through other forms of market research. By analysing customer reviews, businesses can identify common themes and trends in customer experiences, preferences, and pain points. This information can be used to make informed decisions about product development and service improvements. Disadvantages: Customer reviews may not always provide a representative sample of the customer base. Often, reviews are left by customers who had extremely positive or negative experiences, potentially skewing the overall perception. 19 Negative reviews can harm a business's reputation and deter  Secondary market research methods Trade associations, Newspapers Market research trade press and (printed press) reports magazines Organisations such as Most industries have an Financial and economic Mintel and Keynote produce industry association - they information is provided on a a wide variety of expensive are a good source of market daily basis. Newspapers reports that analyse analysis, which is provide local, national and individual markets. particularly useful for new international data which is businesses which may have up to date. They also little or no experience of the provide case studies of market. other local businesses.​ 20 20XX Contoso business plan 21