Market Research, 27 March 2007

Market Research

To understand the difference between primary and secondary market research and to understand how primary and secondary market research may be used by a business to help inform its marketing decisions

• Primary Research
• Secondary Research
• Sampling Methods
• Purpose

Primary Research

• Questionnaries
• Focus Grooups
• Postal Survey
• Telephone Surveys
• Customer Interviews
• Test Markets
• Technology-Internet feedback
• –First hand information
  –Expensive to collect, analyse and evaluate
  –Can be highly focussed and relevant
  –Care needs to be taken with the approach and methodology to ensure accuracy
  –Types of question – Closed – limited information gained; Open – useful information but difficult to analyse
• Quantitative and Qualitative Information:
• Quantitative – based on numbers – 56% of eighteen year olds drink alcohol at least four times a week.
  Doesn’t tell you why, when, how.
• Qualitative – more detail – tells you why, when and how!

Secondary Research

• Internal Sources:
  -Company Accounts
  -Internal Reports and Analysis
  -Stock Analysis
  -Retail data - till data, etc.
• External Sources:
  -Government Statistics
  -EU - Euro Stat
  -Household Expenditure Survey
  -Magazine surveys
  -Other firms’ research
  -Research documents – publications, journals, etc.
  -Web sites: commercial & non-commercial

Sampling Methods

• Random Samples – equal chance of anyone being picked
  –May select those not in the target group – indiscriminate
  –Sample sizes may need to be large to be representative
  –Can be very expensive
• Stratified or Segment Random Sampling
  –Samples on the basis of a representative strata or segment
  –Still random but more focussed
  –May give more relevant information
  –May be more cost effective
• Quota Sampling
  –Again – by segment
  –Not randomly selected
  –Specific number on each segment are interviewed etc
  –May not be fully representative
  –Cheaper method
• Cluster Sampling
  –Primarily based on geographical areas or ‘clusters’ that can be seen as being representative of the whole population
• Multi-Stage Sampling
  –Sample selected from multi stage sub-groups
• Snowball Sampling
  –Samples developed from contacts of existing customers – ‘word of mouth’ type approach!

Purpose

• Size of market
• Market Trends
• Forecasting
• Planning
• Evaluation of Strategies/Promotion
• Assessing Marketing Mix
• Identifying market segments
• Identifying consumer needs
• Identifying Competition
• Identifying Opportunities/gaps in the market
• Reduce Risk

Advantages of Market Research

• Helps focus attention on objectives
• Aids forecasting, planning and strategic development
• May help to reduce risk of new product development
• Communicates image, vision, etc.
• Globalisation makes market information valuable

Disadvantages of Market Research

• Information only as good as the methodology used
• Can be inaccurate or unreliable
• Results may not be what the business wants to hear!
• May stifle initiative and ‘gut feeling’
• Always a problem that we may never know enough to be sure!