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BUSINESS UNIT 17

Why is market research needed?
It is needed so that businesses find out how many people would want to buy the product it
is planning to offer for sale. By carrying out market research, a business can identify
customer needs in a changing and competitive international environment.
Types of information
Quantitative: answer questions about the quantity of something.
Qualitative: answers questions where an opinion or judgment is needed.

Primary research
Is the collection and collation of original data via direct contact with potential or existing
customers. Also called field research.
The process of primary research
1. what is the purpose of the research
2. decide on the most suitable method of research
3. decide on the size of sample needed and who is going to be asked
4. carry out the research
5. collate the data and analyse the results
6. produce a report with the results obtained

Types
 Questionnaires: set of questions to be answered as a means of collecting data for
market research
Advantages:
 Detailed qualitative information is gathered.
 Customer’s opinions can be obtained.
Disadvantages:
× If questions are not well thought, the answers cannot be accurate.
× Takes time and money.
 Interviews: individual face-to-face questions
Advantages:
 The interviewer is able to explain any question
 Detailed info is obtained
Disadvantages:
× The interviewer could lead the interviewee into answering in a certain way
( interviewer bias)
× Time consuming
 Samples
RANDOM SAMPLE is 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 (age,
gender…)
 Consumer panels
Groups of people who agree to provide info about a specific product or general spending
patterns over a period of time
Advantages:
 Detailed info is provided.
Disadvantages:
× Time consuming and expensive.
 Observation
RECORDING (which television channels are being watched)

It should never be assumed that the info is correct. Both primary and secondary research should be used with care. Disadvantages: × People might not give their real feelings.WATCHING (what types of vehicles pass a certain place) AUDITS (count which products have sold well in a shop) Advantages:  Inexpensive Disadvantage: × The info only gives basic figures  Experiments: samples of new products are given out to consumers to taste. Advantages:  Easy to carry out and show the first reactions to products. however. Secondary research may not be as accurate as first because it was initially carried out for some other purpose and you would not know how the information was actually gathered. × Many other potential consumers may shop elsewhere and they will not be asked. no longer relating to current trends in consumers buying habit. customer records. The larger the sample. How to design a questionnaire? Writing the questions  No more than 12 questions  Keep the questions short and clear  Give a choice of age groups  Avoid open-ended questions  Be careful not to lead the interviewee into an answer that may not be true  Think about the order of the questions . they are very expensive Accuracy of market research info The sample selection has to be as near as is possible to the total population. the more accurate the results will be. pricing data. Statistics can become out of date. Secondary research Info that has already been collected and collated and is avaliable for use by others. Also called desk research Internal sources of info  Sales department records. sales reports  Opinions of distribution and public relations personnel  Finance department  Customer service departmentç External sources of info  Internet  Trade and employer associations  Specialist journals  Research reports  Newspapers  Government statistics  Media reports  Market research agencies reports Who carries out market research?   Businesses Specialist market research agencies who will carry out any research it is asked to do.

Questionnaires do not ususally ask for the persons name.Carrying out a questionnaire You may need to create a grid to put the respondents replies on. so that people will be more willing to give honest answers to the questions. Consider:  How many people you are going to ask  At what time of the day you are going to ask  Where are you going to carry out the research .