Market Research

Chapter 4.4
Market Research

Learning intention:
To be able to explain primary and secondary methods of research

3 to 4
I can 5 to 6 6 to 7
distinguish I can explain I can analyse
between primary the features of the usefulness
and secondary methods of of different
research research methods
The Role of Market Research
Market research can be either ad hoc or
continuous and looks at:
□ The products and services of the company
concerned
□ The products and services of the competition
□ The desires and wants of actual and potential
consumers, now and in the future
□ The state of the market and the economy, now
and in the future.
Purpose of Market Research
□ to reduce the risk involved in the
expansion of the firm.
□ to enable market planning to be done
more effectively, and
□ to reduce the likelihood of unwanted
products being put on the market.
Drawbacks of market research
□ GIGO – Garbage in, Garbage out.
Unreliable or inaccurate input data
generates poor quality output of info
□ Inaccurate or unreliable data due to
bias
□ Cost of quality market research is
high
Primary Research
PR or field research collects information which does not
already exist and is collected ‘first hand’
The main PR methods are:
□ Questionnaires
□ Personal interviews
□ Telephone interviews
□ Postal surveys
□ Observation
□ Focus groups
□ Consumer panels
□ Test marketing
□ IT-based research (such as Internet based surveys)
Questionnaires
Questionnaire design is very
important if the business is to gather
the information they need.
They key things to consider are:
□ The balance of open and closed
questions
□ The clarity of questions
□ The use of leading questions
Use of Questionnaires
Tasks
1. What are four different ways a
questionnaire can be used?

2. What are the characteristics of good

questionnaires?
Secondary Research 1
SR sources information which already exists
and has been used for another purpose in the
past.
Data can be collected from within the business
or externally.
The main internal SR methods are:
□ Existing MR reports
□ Sales figures
□ Reports on customers
□ Annual reports/accounts
□ Intranets
□ Stock movements
Secondary Research 2
The main external methods of SR include:

□ Information from competitors

□ Government publications
□ Customer service complaints
□ International organisations (e.g. NATO, WHO)
□ International publications
□ Commercial publications
□ Retail audits
□ General publications
□ Internet
PRIMARY vs SECONDARY
□ Advantages □ Advantages
□ Original data -> Relevant □ Cheap or even free
to the needs of the □ Readily available
business -> more □ Gives data on age groups
reliable and market size
□ Up to date
□ Not available to □ Disadvantages
competitors
□ Prone to bias
□ Disadvantages □ Might be outdated
□ High costs □ May not be relevant to the
business
□ Time-consuming
□ Available to competitors
□ Prone to bias
Market research for IA and EE
□ IA □ EE
□ Relies more on □ Based on
primary research secondary
□ Secondary data research
can be used to □ Can be supported
support primary by primary
data research
□ Financial □ Numerical data is
information important
 Analysing data for your IA/EE
□ Ensure you can identify and explain
linkages between different sources of data
□ Use data analysis tools like pie charts, bar
and line graphs in your text
□ Send questionnaires to different
stakeholders such as customers and
workers
□ Do not interview only one person e.g. dad/
mum- INSUFFICIENT RESEARCH
EVALUATING DATA
■ This is probably the most important criteria
■ Critically explain how you decided on the
methods of research
■ Identify and evaluate the method of sampling
you chose. Why not other methods?
■ Critically analyse the sources:
□ Are they reliable?
□ Sufficient?
□ Accurate?
□ Biased?
□ Up to date?
□ Suitable for your research?
 TRUE OR FALSE
1. Desk research involves collecting new data
that is in a useable format for a firm
2. Market research can reduce risk in business
decision-making because it provides better
information for managers
3. Questionnaires can be used to collect
qualitative and quantitative data
4. Field research tends to be relatively
cheaper to collect and collate than desk
research
Qualitative Market Research
□ Involves getting non-numerical answers
and opinions from respondents
□ Mainly used as part of primary research
□ Used to understand the behaviour,
attitudes and perceptions of customers or
employees
□ Examples:
■ focus groups
■ consumer panels
■ in-depth interview
Quantitative Market Research
□ Relies on larger number of respondents for
statistical analysis
□ Uses a representative sample to gauge the
views of the population
□ Examples
■ Surveys and questionnaires using closed
Questions or a ranking or sliding scales (strongly
agree – strongly disagree)
■ Market share
■ Sales figures
■ Forecast changes in consumer income levels
Qualitative vs
□ Advantages
□ Explore attitude on personal
level
□ Encourage discussion
□ Flexible for interviewer to
adapt questions to
interviewees
□ Disadvantages
□ Sample size must be
sufficient for accuracy
□ Potential bias
□ Lack of privacy
□ Skilled moderator should be
used to ask relevant Qs
Quantitative
□ Advantages
□ Factual and measurable
information
□ Cover wider audience
□ Faster and easier to run
□ More accurate data
□ Large sample sizes make
better generalizations
□ Disadvantages
□ Limited by set answers on
surveys
□ Participants may give
dishonest opinions
□ Unable to follow-up any
answers given
□ Depends on quality of Qs