It is very important that market research is carried out accurately, as they want to find out how many people would want to buy the product that is planning to offer.
Market research is essential if a business wants to remain competitive in the future.
Quantitative information - answers questions about the quantity of something.
Qualitative information - answers questions where an opinion or judgement is necessary.
Primary Research (or Field Research)
Primary research is useful for finding out new information, and getting customers’ views of your products.ADVANTAGES | DISADVANTAGES |
Data is up-to-date. | Expensive to collect |
It is relevant and specific to the businesses’ products. | Time Consuming |
- | Needs large sample size to be accurate. |
Process of Primary Research:
- Purpose of the market research
- Decide on the most suitable method of research
- Decide on the size of sample needed and who is going to be asked
- Carry out the research
- Collate the data and analyze the results
- Produce a report of the findings
Methods of market research:
QUESTIONNAIRES | |
Advantages | Disadvantages |
Detailed qualitative information. | If questions are not well thought, the answers will not be accurate and would not benefit the organisation. |
Customers’ opinions can be obtained. | It can take a lot of time and money. |
INTERVIEWS | |
Advantages | Disadvantages |
Able to explain any questions that the interviewer doesn’t understand. | The interviewer could lead the interviewee into answering in a certain way, resulting in inaccurate results due to interviewer bias. |
Detailed information about what the interviewee like and dislike about the product can be gathered. | It can be time consuming. |
CONSUMER PANELS | |
Advantages | Disadvantages |
They can provide detailed information about consumers’ opinions. | They can be time-consuming and expensive and biased if some people are influenced by others’ answers. |
OBSERVATION | |
Advantages | Disadvantages |
It is an inexpensive way of gathering data. | The information only gives basic figures. It does not provide the business with reasons for consumer decisions. |
EXPERIMENTS | |
Advantages | Disadvantages |
Easy to set-up and carry out. | People might not give their real feeling in order to not cause offence. |
Easy way to find consumer’s first reactions to products. | Many other potential customers may shop elsewhere and they will not be asked. |
Secondary Research (or Desk Research)
When the organisation collects data from secondary sources - when the information is originally produced by someone else. E.g. Internet, newspapers, media reports, specialist journals, government reports, etc.
ADVANTAGES | DISADVANTAGES |
Cheap | Data may be out of date. |
Quicker as data already exist. | Data may be available to competition. |
Sampling
It is a small group of people which is thought to represent the market as a whole. There are two types:
Random Sample - when people are selected at random as a source of information for market research.
Quota Sample - is when people are selected on the basis of certain characteristics (e.g. age, gender or income) as a source of information for market research.
