Unit 1 Assignment 2

What is market research and what is the purpose of it?

Market research is researching the market to meet the needs of today’s customers, research by
looking for new products that will meet customer’s needs. It also means being first on the market
with new products and assessing the businesses new skills and abilities to meet the challenges.

Purpose of market research is to make sure that business don’t sell a product that is not bought by
its customers. They do this to reduce the chances of selling a product customer won’t buy.

Identify customer needs

When target market research is complete the business is likely to use price, quality, choice and
convenience aiming to collect information and feedback from customers and seeing what prices
people would pay for it.

If the business didn’t do their research, it results in them losing money and sales which the market
doesn’t want.

e.g., Apple (Customer Pulse Program)

Identify gaps in the market

A gap in the market is where there is a product or service that doesn’t exist. It can also be producing
a load of profits if a business can place themselves as the owner of the gap.

e.g., Netflix (Moving from DVD rental to online streaming) and Gymshark (starting up)

Reduce risk

Businesses cannot eliminate risks it doesn’t matter how much research is done. However, they can
reduce the risk by getting feedback from their customers.

The businesses risk comes in different shapes and sizes, there are some risks associated with money
for the products that may not be needed in the market.

The business also faces the risk of losing their customers or facing public backlash if they fail to
understand the market, they operate in.

E.g., KFC (products are tested on site to make sure there is a good product for them to get on the
market. Before other food companies so they are first out there, they could become big and make
profits from it.)

Make better decisions

The final purpose of market research is to help businesses make the best decisions. These decisions
are around: making a new product or service, making changes to existing products, or even investing
to a new store location.

In a more informed decision can be made about the product because of market research.

e.g., Lego (Friend’s toy range for girls)

Joe Walmsley 01/12/2021 – 12/01/2022

Unit 1 Assignment 2

Primary market research

I am going to talk about Primary research the first thing I am going to talk about is surveys,
questionnaires, focus groups, and interviews, observations and test marketing. Primary research is
research which isn’t already available to the business. This method is used in the business to observe
and see customers buying habits and to make sure products at eye level are the branded products
and the end of the aisle is promoted products. Another source of market research is receiving
opinions that could be on new product ideas – taste testing and recommendations, also prize draws
for completing market research activities and in store interviews via feedback from group – product
– sampling. The re are 4 ways of collecting primary research. I will outline each one and the
advantages and drawbacks of each

Surveys and questionnaires

Surveys are based on question but also involve the process of analysing the participant responses. A
questionnaire is a written set of questions aimed at collecting information about individuals.

The benefits of questionnaires and surveys are they are often shorter in length and they are used to
gather vast amounts of feedback in a short time frame. However, there are drawbacks of
questionnaires and surveys and their findings often lack depth and the people participating may not
take the process seriously.

Focus groups and Interviews

A focus group can be a one-off process or conducted on a regular basis. These are formalised
meetings with other team members.

A benefit of focus groups and interviews is that it provides more in-depth information. Another
benefit is that it’s an opportunity for the researcher to ask further questions. However, there are
drawbacks of focus groups and interviews. They are time consuming and expensive for a smaller
range of results. Another drawback is the number of participants needs to be carefully considered.

Observations

Aims to identify patterns and trends in customer behaviour and shopping habits. Provides genuine
insights into customer behaviour and experience.

Benefits of observations are the routes customers take around the store and the impact of
promotions. However, there are drawbacks of observations so this will impact on the product
placements.

Test marketing

When a business trials their product with customers before it’s officially launched. It is used for new
products which are new to the market and not very well known by the target market. They test the
product in a small group of stores prior to a nationwide launch.

Benefits provides real data and insights. However, there are drawbacks this is expensive and time
consuming which may not accurately represent the target market.

Joe Walmsley 01/12/2021 – 12/01/2022

Unit 1 Assignment 2

Secondary market research

I am going to talk about secondary market research which is information that already exists, or
another organisation has creates. E.g., their websites and published sales figures and information.
This is also known as desk research.

Another source of secondary research could be through news articles that reports new technology
coming through the system all the time which is advertised on newspapers & TV’s.

Looking at statistics and finical information which have been published this shows how the business
is looking by a range of different statistics which shows how the business is doing is it growing or is it
declining?

There are 4 ways of collecting secondary research. I will outline each one and the benefits and
drawbacks of each.

Internet research

Internet research provides the researchers with a wealth of data and information. Insights into the
industry or the activity of competitors. It is specific to the industry which the business operates
within relevant and up to date information about the trends, businesses and behaviours of
consumers in a specific industry.

Some benefits of internet research are free of charge, very quick and relatively easy to access.
Another benefit is it can be accessed instantly for free or at a relatively low cost. However, there are
some drawbacks of internet research are they must filter out misinformation or fake news and
businesses must be aware of potential bias or mistakes.

Market reports

Market reports are specific to the industry which the business operates within. It must be relevant
and up to date information about the trends, businesses and behaviour of consumers in a specific
industry, some market reports can be accessed free of charge and some require the business to pay
for access. It is widely available but anyone or any organisation can essentially produce a market
report.

Some benefits of market reports are they can be accessed instantly for free or at a relatively low
cost. However, there are some drawback of market reports as the business must be aware of
potential bias or mistakes.

Government reports

Government reports provide vast quantities of data and information which is used to support
decisions such as rates of pay, the target market, or what products the business develops and sells.

Some benefits of government reports are they are free of charge, up to date and very quick to
access. However, there are drawbacks of government reports as they tend to be more generalised
and representative of the whole population rather than specific industries.

Joe Walmsley 01/12/2021 – 12/01/2022

Unit 1 Assignment 2

Internal resources

Internal resources are Information and data which is already available within the business. Sales
reports help businesses to set forecasts and targets. Loyalty cards and schemes provide detailed
insights about customers buying behaviours, wants and needs. Performance of historic marketing
activities help to shape future campaigns

A benefit of internal resources is exclusive data, which is easy to access. However, there are
drawbacks of internal resources as it can become outdated quickly and usually needs supporting
with additional data and information.

Quantitative and qualitive data

Quantitative data explanation

 Quantitative data is structured and statistical with a much narrower focus in comparison to
qualitative data.
 Participants are asked close ended questions which include ‘yes’ or ‘no’ answers or multiple-
choice questions such as ‘who’, ‘what’ or ‘when’.
 Quantitative research is to a theory or assumption which has to be confirmed.

Quantitative data benefits

 quick to conduct.
 More participants get involved.
 It makes it easier to analyse the results and understand them.

Quantitative data drawbacks

 Focuses on numbers rather than facts

 No meaning behind any of the data.

Qualitative data explanation

 This is expressed in words

 Used to understand the collection of participants views, thoughts and perspectives,
providing the business with a description and reason behind the way they feel.

Joe Walmsley 01/12/2021 – 12/01/2022

Unit 1 Assignment 2

Primary research

Bias

Some benefits of bias are if research is collected by an independent company or person then
bias will be less of a problem – it is not often used. However, there are some drawbacks of bias
which are, they can be worded so that they lead their respondents to certain answers, there
could be a poor questionnaire design for method of analysing data results can produced bias
data, Misleading information can be collected if it isn’t processed correctly, nature of asking
questions for a specific purpose leads primary research open to being biased towards their
company. People give the answer they think they should give. This would be a big issue for Tesco
as customers would give wrong information on the questionnaires as they just want to do their
shopping and move on so this would relate to poor information on the questionnaires.

Control of the results/ data

Some benefits of controlling the results are that high quality results can be achieved with the use
of specific questions being asked as the questionnaire has been designed by the company
themselves, relevant information is collected which is useful for the company's requirements,
they have a total control of what to ask, where to ask them, what to ask. End information is high
quality and useful. However, there are some drawbacks of controlling the data because it's not
always feasible to undertake primary research – time and cost issues. This could probably
benefit Tesco as the questionnaires designed by the company so they will be getting proper
feedback and then they can adjust their requirements to meet customers needs.

Cost

A big drawback of cost in primary research is it’s very expensive – cost paying staff to collect the
data and printing questionnaires. To overcome this issue Tesco have moved their research
online in order to reduce costs and environmental impact.

Currency of information- how recent it is

Some benefits of currency of information are all pieces of data and information are collected will
be very recent so they will be up to date. This will mean data collected will be relevant and
provide the company with new pieces of data or information. However, there are some
drawbacks of currency of information which are you must keep doing primary research to keep
track of customers opinions – this can rapidly change over time. This could benefit Tesco
because they can keep up with collecting data all the time and keeping up with relevant data.

Ease of access

Some benefits of ease of access are doing your own research, which is easy to do, and it does
not need to be shared with anyone – you can use your data however you want to. However,
there are some drawbacks of ease of access that people may take their time answering
questions, A large sample size is needed to provide reliable data which is difficult to achieve.
Collecting research from the correct sample of data so the data would be useful. E.g. asking
older people about how effective nappies are isn’t worth it, there are limited methods of
collecting information are available – it is relying on technology accessibility. Tesco could
probably benefit as they have a wide range of customers from young to old so the majority can
rely on technology.

Joe Walmsley 01/12/2021 – 12/01/2022

Unit 1 Assignment 2

Time taken to collect

A big drawback of the time taken to collect information is it’s time consuming because you must
ask people for their own opinion – especially when collecting qualitative data. As people do not
want to fill in questionnaires! for example a big store like Tesco will reward them with Tesco
points on their Tesco Clubcard’s.

Reliability of sources

Some benefits of the reliability of sources are that the relevant information is collected so that
the data is reliable. However, there are drawbacks for example if taste or free samples are
involved this can give a response which is the quickest not the real thoughts. If Tesco start to
give out free samples all the time this would relate to a very quick response and no thought
would be put into it.

Secondary Data:

Bias

A big drawback of Bias in secondary data is that it is focusing on too narrow of a search and is
lacking in specific content. Tesco would overcome this by doing larger research and finding out
more information to meet customer’s needs.

Control

A big drawback of control in secondary data is not specifically collected to their needs or for a
purpose, this general information doesn’t give enough feedback on changes. Tesco could
overcome this by rolling out a new questionnaire each month.

Cost

An advantage of cost in secondary data is cheaper than primary as this data already exists, so
you must find the data. This helps Tesco because the data would already be there and there
would be an employee probably keeping up to date with all the data.

Currency of information

A main drawback of currency of information in secondary data is very likely to be at least 6

months out of date, in some cases it can make it totally useless when information and tastes
rapidly change. In Tesco’s case this would be kept up to date at all times.

Ease of access

An advantage of ease of access in secondary data is that there will be a large bank of sources
available mostly online which will be very easily accessible and produced on a large scale.
Tesco’s advantage to this is that the majority of their services are accessible online.

Joe Walmsley 01/12/2021 – 12/01/2022

Unit 1 Assignment 2

Time taken to collect

An advantage of the time taken to collect in secondary data is that the information is quicker to
collect as it is already being gathered – in some cases it is instantly available as an online
resource. However, there is a drawback as this can be overwhelming to find the relevant
information needed this might be that the data is out of date year to year and there could also
be changes. Tesco’s data would be very quick to collect as it has already been gathered and is
available online.

Reliability of sources

A drawback of reliability of sources in secondary data is that inaccurate data can be collected
that is not specific for the purpose – so this relates to not asking the correct people, so you’re
given false and inaccurate information. This could be a drawback for Tesco if Tesco do not ask
the correct people what their thoughts are when collecting data as this is an important part of
the Tesco business.

Joe Walmsley 01/12/2021 – 12/01/2022