Market Research

Master market research! Understand types, benefits, and analysis for business success. Perfect for students.

Importance of Market Research Market research is important because customers differ in terms of:•The benefits they want•Amount they are able to or willing to pay•Media (e.g. television, newspapers, websites and magazines) they see•Quantitiesthey buy•Time and place that they buyInsights Provided by Effective Market Research:•Dimensions of the market (size, structure, growth, trends etc.)•Competitor strategies (market share, positioning, USPs)•Needs, wants and expectations of customers ( how these are changing)•Market segments – existing and potential opportunities for new segments Product and Market Orientation Sort the following statements under their correct key term: Product Orientation Business develops products based on what it is good at doing Market Orientation Business responds to customer needs and wants – designs products accordingly Market Share Data Which mobile phone provider lost the most market share from 2009 to 2014? Samsung Nokia Sony ZTE Which group doubled their market share in the same time period? Lenovo Motorola Research in Motion Others Two Key Categories of Market Research Sort the following statements under their correct key term: Primary Research Data collected first-hand for a specific research purpose Secondary Research Data that already exists and which has been collected for a different purpose Match each source of secondary data with its correct characteristic: Secondary Data - Main Sources Google A great way of getting quick market research for free Government departments Provide detailed insights on the economy and on many industry sectors Trade associations Most industries have an industry association – a great source of market analysis Trade press & magazines Industry and market insights from professional business publishers Competitor websites & marketing materials Valuable information on marketing activities of competitors Market research reports Commercial organisations produce a wide variety of reports (online & print) that analyse individual markets & industries Benefits Drawbacks of Primary Secondary Research Sort the following benefits and drawbacks into their correct groups: Primary Research - Benefits (3) Directly focused to research objectives Kept private – not publicly available More detailed insights – particularly into customer views Primary Research - Drawbacks (3) Time-consuming and costly to obtain Risk of survey bias Sampling may not be representative Secondary Research - Benefits (3) Often free and easy to obtain Good source of market insights Quick to access and use Secondary Research - Drawbacks (3) Can quickly become out of date Not tailored to business needs Specialist reports often quite expensive Quantitative v Qualitative Sort the following statements into groups based on whether they apply to quantitative or qualitative research: Quantitative (4) Concerned with data Addresses question such as “how many?”, “how often”, “who?”, “when?” and “where?” Based on larger samples and is, therefore, more statistically valid The main methods of obtaining this data are the various forms of survey – i.e. telephone, postal, face-to-face and online Qualitative (4) Based on opinions, attitudes, beliefs and intentions Answers questions such as “why”? “Would?”, or “how?” Aims to understand why customers behave in a certain way or how they may respond to a new product or service Focus groups and interviews are common methods used to collect qualitative data Quantitative v Qualitative - Pros and Cons Sort the following benefits and drawbacks into their correct groups: Qualitative Research - Benefits (4) Essential for important new product development and launches Focused on understanding customer needs, wants, expectations = very useful insights for a business Can highlight issues that need addressing – e.g. why customers don’t buy Effective way of testing elements of the marketing mix – e.g. new branding, promotional campaigns Qualitative Research - Drawbacks (2) Expensive to collect and analyse – requires specialist research skills Based around opinions – always a risk that sample is not representative Quantitative Research - Benefits (3) Data relatively easy to analyse Numerical data provides insights into relevant trends Can be compared with data from other sources (e.g. competitors, history) Quantitative Research - Drawbacks (3) Focuses on data rather than explaining why things happen Doesn’t explain the reasons behind numerical trends May lack reliability if sample size and method is not valid Benefits and Drawbacks of Sampling in Market Research Sort the following benefits and drawbacks into their correct groups: Benefits of Sampling in Market Research Even a relatively small sample size (if representative) can provide useful research insights Using sampling before making marketing decisions can reduce risk and costs Sampling is flexible and relatively quick Drawbacks of Sampling in Market Research Biggest risk = sample is unrepresentative of population – leading to incorrect conclusions Risk of bias in research questions Less useful in market segments where customer tastes preferences are changing frequently Growing Use of IT to Support Market Research The capabilities of modern IT have transformed market research. Now it is relatively easy to learn about consumer preferences and buying habits by mining massive sets of quantitative data. Complex algorithms can uncover patterns and correlations that enable more effective marketing.Data MiningIs an example of secondary research and relies on data that is already there. The key benefits of data mining are that it is quick automated and so huge data sets can be analysed which reduces the need for sampling. Data can also be linked (e.g. transactional data with customer profiles).Social MediaIs both a source of primary and secondary research. Software can quickly highlight what customers are saying about the product or brand (secondary research) but also it is easy to set up and analyse survey results in real time. There are a wide range of powerful software applications that help to manage social media research integrate it with other business systems.