Marketing Research

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Marketing Research
GCSE Business Studies
tutor2u
Revision Presentations 2004
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Purpose of Marketing Research

• Businesses need accurate up-to-date information
  because the business world is always changing
  around them
• Changes in technology
• Changes in customer tastes
• Changes in competitor products
• Changes in economic conditions
• How marketing research can help
• Gain a more detailed understanding of consumer
  needs
• Reduce risk of product / business failure
• Help anticipate / forecast future market trends

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Information a Business Needs

• Who are our customers?
• How do customers make buying decisions in our
  market?
• How well are our products selling?
• What are our competitors doing?
• How can / should we respond to changes in the
  marketplace?

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Main Sources of Business Information

• Internal company information
• Sales, orders, customer profiles, stocks,
  customer contact
• Marketing intelligence
• Everyday information about developments in the
  market
• Suppliers, customers and distributors
• Bought from specialist business intelligence
  providers (e.g. Mintel)
• Market Research
• Commission specific studies to obtain data

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Marketing Research Process

• Important to understand and define the problem
• Research plan should aim to be cost-effective
• Choose between primary and secondary sources
• Use appropriate research tools and methods
• Design the sample with care
• Research needs to be closely managed

Define the Problem
Define Research Objectives
Choose Data Sources
Choose Research Methods
Construct Sample
Set Budgets / Deadlines
Get Started!
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Uses of Marketing Research

• About the market
• Market potential for new products Forecasting
  future demand Competitor behaviour and
  performance Market shares
• About products
• Likely customer response to new products
  Comparison of existing products in the market
  (features, costs etc) Forecasting new uses for
  existing products New product development
• About promotion
• Effectiveness of advertising Effectiveness of
  direct marketing and/or the sales force
  Competitor promotional strategies
• About distribution
• Use and effectiveness of each distribution
  channel Opportunities to sell direct Cost
  of transport warehousing products
• About pricing
• What happens to demand following changes in price
  Analysis of impact of changes in price on
  costs and profits Customer perceptions of
  pricing

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Quantitative Research

• Quantitative marketing research is all about
  numbers!
• Quantitative research tires to get hold of
  statistically valid, numerically measurable data
• Usually related to data on the market (e.g. size,
  growth and market shares)
• Usually obtained via surveys
• Concerned with obtaining hard data to answer
  questions such as
• How many?
• How much?
• How often

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Qualitative Research

• Qualitative research is quite different from
  quantitative research
• It is concerned with finding out soft
  information
• Main purpose to understand consumer behaviour,
  attitudes and perceptions
• Obtained by methods designed to get detailed
  responses e.g. interviews and focus groups
• Qualitative research topics usually explored in
  some depth

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Two Sources of Research Data
Primary Sources
Secondary Sources
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Primary Research

• Primary market research doesnt exist until it is
  collected for the first time
• It involves collecting data for the first time
  and for a specific purpose
• Can be carried out by a business itself or by a
  specialist market research organisation
• Expensive to obtain but should be up-to-date
  and exclusive
• Obtained by several methods
• Observation
• Focus groups
• Experiments
• Surveys

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Secondary Research

• The difference with primary research is that
  Secondary Data already exists
• Has been collected by someone else for another
  purpose
• Can be obtained from internal data sources
• E.g. records of transactions by the business
  sales and activity reports
• Should always be considered first, because cheap,
  quick and convenient
• May be out of-date or not relevant to a new
  product
• Also many external sources of secondary data
• Commercial market research organisations (e.g.
  Euromonitor)
• The government (substantial and usually free)
• Competitors (e.g. accounts, web sites)
• Trade publications / magazines
• Industry associations (conduct general research
  for members)
• General media

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Observation

• Method to obtain primary research data
• Involves watching people behave, noting and
  analysing their reactions
• Can be carried out
• Under controlled conditions (laboratory)
• In real-life situations (the field)
• Common observational methods
• Traffic audits
• Television and radio panels
• Retail store audits

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Focus Groups

• Method of obtaining primary research data
• Used to gather qualitative information
• Involves a small group of people (6-10)
• Group spends time with a moderator to discuss
  their opinions and attitudes to a topic / product
• Objective to obtain detailed responses
• Role of the moderator is crucial
• Unbiased
• Should carefully guide the conversation

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Experiments

• Method of obtaining primary research data
• Aim to measure ad evaluate customer reactions
  to changes in the marketing mix
• Can be done under controlled conditions or in
  the field
• Pilot trials of new products and services are a
  common use of experiments
• Lower profile
• Chance to test whether things work before
  larger-scale roll-out
• Reduces risk and uncertainty

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Surveys

• Key research method to obtain information from
  large samples
• Wide range of uses ascertain facts, beliefs,
  opinions, attitudes
• Various methods to complete surveys
• Interviews
• Telephone
• Face-to-face
• Postal
• Online

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Continuous, Ad-hoc Omnibus

• Three other research methods
• Continuous research
• Carried out on an ongoing basis (e.g. every day /
  week / month)
• Gathers data to illustrate trends (e.g.
  consumer buying habits)
• Example consumer panels (National Readership
  Survey)
• Ad-hoc research
• Carried out on a one-off basis
• Designed to meet research needs of a business at
  a specific moment
• Can vary widely in terms of objective, scale,
  scope and cost
• Omnibus research
• Involves several businesses contributing their
  own questions to a multi-part survey
• Can be more cost-effective for smaller firms
• Wide range of omnibus surveys available (e.g.
  Mori omnibus)

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Questionnaires - Introduction

• The most common method for collecting primary
  research data
• What is a questionnaire?
• A series of questions used to collect data from a
  specified number of respondents
• Can be self-completed (by respondent) or on their
  behalf
• Requires careful design to be effective

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Sampling in Market Research

• Small section of population is asked a number of
  questions or is given opportunity to use a sample
  of product to indicate what whole population
  would think about product
• Methods
• Quota sampling asking people who have certain
  characteristics (e.g. aged between 18-25)
• Random sampling everyone has an equal chance of
  being asked a question
• Stratified sampling population is segmented by
  a common characteristic
• Cluster sampling target population is divided
  into groups (normally by geographical region) and
  random sample taken from these groups