Market Research

Richard O’Callaghan Hook Head Training and Consulting Limited

Collect

certain information about your customers, market and competitors Tells you about your potential market, prices, trends, competition, target customer, its preferences, income, habits, accessibility, convenient time and plans This information should be accurate, and reliable to help you make the right business decision

Market Research

What

type of information do you think would be useful on your market?

Question for Everybody

What kind of business should I do?  What is the demand for my business?  Who are my customers? /Is there a market?  What are the market forces that will affect my business?  Where should I locate my business?  How much profit can I get at different locations and times?

Who are my competitors and what kind of product, price and service they offer?  How I differentiate my business from my competitors?  What types of service do my customer prefer?  What types of advertising attract my customers?  What is the market price and how I can change my price accordingly?

First Step – What do you need to know

 What

are the new trends, product, time, location and service in the market? And how I adapt them?  What are my weaknesses and strengths in my business compare to my competitors?  How I can differentiate my business and make it unique?  Should I change and redirect my advertising campaign according to the recent situations?  How can I change my customers’ spending habits?  How can I expand my business with minimum cost?

An Existing Business

Would

it really matter if you didn’t do any Market Research?

Why?

Question

Quantitative

◦ Based on numbers – 56% of 18 year olds drink alcohol at least four times a week - doesn’t tell you why, when, how ◦ Absolute numbers ◦ The Likert Scale
Qualitative

◦ More detail – tells you why, when and how! ◦ What did you think? ◦ How did you feel?

The Nature of Research Data

The

public library Vocational schools Observation /questions Chambers of commerce Potential consumers/ survey Business competitors

Wholesalers

and manufacturers Government agencies Trade associations Business publications & magazines Web

Sources of Information

What

kind might you find on the Internet to find information for your market research? Do you think there are any issues in using this information? If you do what are they?

Question

Types of Research
Primary and Secondary Research

Secondary

Research

◦ Use existing research for your own purposes ◦ E.G. CSO Household Survey
Primary

Research

◦ You go out and do the research yourself ◦ E.G. Survey on South Street

Research is Conducted in Two Basic Ways

Generally What

are good sources of information for your market? What do you want to know?
◦ ◦ ◦ ◦ Macro trends? Competitive activity? Competitive pricing? Commentator’s views?

◦ Why?

you do secondary research first

Secondary Research

 Who

do you think your customers are?  What others do you need views from?  How are you going to approach getting their views?  How many people’s views do you need to get?  What do you want to know from each?
◦ Who/what groups do you need to talk to? ◦ What do you want to know? ◦ What are you going to do?

Primary Research

Secondary Research
Using other peoples work

Secondary

data is data which has been collected by individuals or agencies for purposes other than those of our particular research study It is possible that much of the information we required has already been collected Secondary data is much cheaper to collect than primary data

Secondary Research

Accounts Internal

Reports and Analysis Stock Analysis Retail data - loyalty cards, till data, etc.

Internal Sources

 Government

Statistics (CSO)  EU - Euro Stat  Trade publications  Commercial Data - Gallup, Mintel, etc.  Household Survey  Magazine surveys  Other firms’ research  Research documents – publications, journals, etc.  Suppliers

External Sources

It

was not created for us so we are making assumptions regarding it’s applicability Bias There may be error within the research Might be out of date The methods used might be flawed

Problems with Secondary Research

Primary Research
Doing the job yourself

Primary

Research

◦ ◦ ◦ ◦

First hand information Expensive to collect, analyse and evaluate Can be highly focussed and relevant Care needs to be taken with the approach and methodology to ensure accuracy ◦ Types of question – closed – limited information gained; open – useful information but difficult to analyse

Market Research

Surveys Experimentation Observation Focus groups In-depth interviews Projective techniques Physiological Measures

Primary Research Methods

If

you wanted to design a questionnaire in order to conduct market research for your new carpet cleaning business, what 5 quantitative and 5 qualitative questions that you might ask people walking down North Street?

Quesiton

Keep your questions very short, understandable, and clear  Ask direct questions  Ask questions that can be answered easily, open/close-ended  Ask questions that do not have more than one meaning  Make sure your questions do not offend anyone

Make your questions only in your subject matter  Customise your questions to encompass more than one group of people, male/ female  Be honest with the intent of the questionnaire  Give enough time answer  Be courteous and friendly when asking people to participate in your survey  Ask questions in different repeated ways, so you minimise missing data

How to Design a Questionnaire

For

research to be effective your sample groups must be appropriate Random Samples – equal chance of anyone being picked
◦ May select those not in the target group ◦ Sample sizes need to be large to be representative ◦ Can be very expensive

Sampling - Here comes the Science Bit

 Stratified

or Segment Random Sampling

◦ ◦ ◦ ◦ ◦ ◦ ◦ ◦ ◦

Samples on the basis of a representative segment Still random but more focused May give more relevant information May be more cost effective

 Quota

Sampling

By segment Not randomly selected Specific number on each segment are interviewed May not be fully representative Cheaper method

Sampling

Conclusion

Helps

focus attention on objectives Aids forecasting, planning and strategic development May help to reduce risk of new product development Communicates image, vision, etc. Globalisation makes market information valuable (HSBC adverts!!)

Advantages of Market Research

Information

only as good as the methodology used Can be inaccurate or unreliable Results may not be what the business wants to hear! May stifle initiative and ‘gut feeling’ Always a problem that we may never know enough to be sure!

Disadvantages of Market Research

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