Identify 3 types of market research

EQUATES IN IRON

VERY US

CUPS FOUR GO

PEARSON
EDEXCEL
INTERNATIONAL

GCSE BUSINESS 4.1 Market research

 4.1 MARKET RESEARCH

 IN THIS UNIT YOU WILL LEARN:

 The purpose of market research:
 to identify and understand customer needs
 to identify gaps in the market
 to reduce risk
 to inform business decisions

 Methods of market research:

 primary research:
 survey
 questionnaire
 focus group
 observation
 test marketing
 4.1 MARKET RESEARCH

 IN THIS UNIT YOU WILL LEARN:

 Methods of market research:
 secondary research:
 internet
 market reports
 government reports

 The use of data in market research:

 qualitative and quantitative data
 the role of social media in collecting market research data
 the importance of the reliability of market research data
 THE PURPOSE OF MARKET RESEARCH

 Marketing is the identification, satisfying and revisiting of

customer needs
 This therefore requires market research
 Market research is the collection and analysis of data and information to
inform a business about its market
 This could include:
 Customers
 Competitors
 Market place
 Opportunities
 THE PURPOSE OF MARKET RESEARCH

 Businesses will conduct market research to:

 Identify and understand customer needs
 Understand the target market
 Design products to satisfy customer needs
 Identify gaps in the market
 Assess what is currently in the market
 Identify market opportunities This will involve
 Develop new business ideas collecting
 Assess feasibility of filling that gap information
 To reduce risk about demand,
 Providing an understanding of market trends competition
 To gain insight into products to produce in future and target
 To inform business decisions market.
 Trends and patterns in buying behaviours
 Likes and dislikes
 Factors influencing choice
 Attitudes to different elements of the marketing mix
 METHODS OF MARKET RESEARCH

 There are two ways of categorising market research:

 Primary and secondary
 Primary market research (field research) involves the collection of first hand
data that did not exist before. Therefore it is original data
 Secondary market research (desk research) is research that has already
been undertaken by another organisation and therefore already exists
 Quantitative and qualitative
 Quantitative market research is numerical, the data collected is easy to
analyse and represent graphically
 Qualitative market research is non numerical. It is about people’s opinions
 METHODS OF MARKET RESEARCH

What factors would a

business need to consider
when deciding on a Market Research Primary Secondary
research method ?
Advantages • specific to your needs • already exists
• up to date • may be compiled by experts
• can be cheap • quick to access
Disadvantages • lack of expertise • can be out of date
• time consuming • often expensive
• results may be limited • not specific to you

Would you take part in market research on lip balm?

 QUESTION TIME

Jasmine is a designer of unique silver and pewter rings for both men and women. Her friends
and family love her designs and believe that she could become known as a top designer.
Jasmine’s Mum has offered to help her set up a small shop in their home town of
Bournemouth. Her Dad thinks that this is a good idea. However, he is concerned about the
number of new shops that open and close shortly afterwards due to a lack of demand. He
suggests that Jasmine should carry out some market research before opening the shop.

1. What is meant by ‘market research’?

2. Explain 2 reasons why Jasmine should carry out market research before opening her
shop.

3. Explain 1 reason why Jasmine should look at her competitors in the market.

Have you ever taken part
in a survey?
What type of survey was
it?
What was the purpose of
the survey?
How do you respond when
someone approaches you
in the street or rings you
up asking you to take part
in a survey?
Can be combined with viewing or trying a product or range of products e.g. taste tests.
Why might a business
choose to run a focus group
rather than a survey to
collect consumer opinions?
METHO DS OF PRIMARY MAR KET R ESEAR CH
Surveys
Normally questions are short and closed.
Often provides respondents with options to choose from.
Can be postal, telephone, face–to-face or on-line.
Questionnaires
May include open and closed questions, but primarily closed.
A relatively easy way to collect consumer opinions.
Normally paper based.
Focus Groups
Groups of consumers who share their views and opinions in a focused discussion.
Provides qualitative data.
Allows for follow up questions.
 METHO DS OF PRIMARY MAR KET R ESEAR CH

Observation
A method of collecting and analysing data from watching the actions of individuals in
either natural or planned situations.
This may take a covert form where those being observed are unaware.
This allows businesses to understand consumer behaviour, particularly as individuals are in
their natural environment.
However, this raises ethical questions of privacy.
It could be overt, where individuals realise that they are being watched.
This means that individuals might modify behaviour.
Test marketing
A technique used to analyse consumer response to a new product or service by launching
it to a small group thought to be representative of the whole population.
A geographical or demographic segmentation can be used to stimulate the response to a
launch.
To gain reasonably representative results all aspects of a full launch must be in place e.g.
marketing mix, distribution, media coverage etc.
 METHO DS OF SECO NDARY MAR KET R ESEAR CH

Internet
Using information that already has been collected and is available on the internet.
Wide range of information freely available.
Can carry out research independently.
Examples of internet research:
www.statistics.gov.uk
www.yell.com
www.upmystreet.com
Visit these sites to identify the type of information available.
Explain how a business looking to set up in your area might use this information.
Market reports
An analysis of the conditions associated with a particular market e.g. the fashion industry
This might include demand and supply, prices and trends
Normally undertaken by private organisations
Market Research organisations include MORI and MINTEL
Government reports
Publications released by government organisations regarding a range of issues
These enable businesses to understand conditions in the economy
Examples include National and Local Government e.g. Office for National Statistics
 METHODS OF MARKET RESEARCH

Work in pairs to complete the table.

Research method Advantages Disadvantages
Questionnaires

Surveys

Focus groups

Observation
 QUESTION TIME

Jasmine is setting up a business making and selling handmade silver and pewter jewellery.
Each item will be unique. Her dad has suggested she should first carry out some detailed
market research. He suggested she used secondary market research due to her limited budget.
However, Jasmine is also keen to speak to potential customers to find out their views on her
designs, location and pricing.

1. What is meant by ‘secondary research’?

2. Explain 2 benefits to Jasmine of using secondary market research.

3. Suggest a suitable market research method for Jasmine to find out about consumers’ opinions.
Justify your answer.
 VIEW SUBWAY’S ONLINE SURVEY

Is this an example of primary or secondary research?

Why do you think Subway collect personal information from their customers?

State and justify one other method Subway could use to help meet customers’
needs.

Explain how Subway could use the results from this survey to help meet
customers’ needs.
 SAY WHAT YOU SEE

 Just collecting market research is not enough, it is the interpretation

and analysis that is important.
 Is this easier for qualitative or quantitative research?
 THE ROLE OF SOCIAL MEDIA IN COLLECTING
MARKET RESEARCH DATA

 Social media is the use of the internet to create online communities

 Increasingly, businesses use social media to gain insight into markets
 Social media provides easy and cost effective access to customers and
key players in the market
 Social media platforms, such as Twitter or Facebook, allow businesses to
analyse trends, making their findings up-to-date
 Businesses have social media departments that comb the internet
gathering data that can be used to understand markets
 USE OF MARKET RESEARCH

What are the advantages  Market research findings must be interpreted and used to inform
of presenting findings
graphically? decision-making
 Results may be presented:
 Numerically
 Statistics, tables, %

 Written form
 Report, quotes

 Graphically
 Pie chart, bar chart, line graph, map
 RELIABILITY OF MARKET RESEARCH DATA

You need to be able to

interpret and use qualitative  How useful is this market research report?
and quantitative market
research findings.  How could it inform decision making for:
The validity of market  A fast food van attending a music festival
research data can be
questioned. Those  A high street chain of sandwich shops
undertaken the research  An entrepreneur looking to establish a new healthy eating café in your local area
might have ulterior motives,
leading to bias in reports.

The quality of findings can  How useful is this market research report?
also be questioned. Reports
are only as good as the
quality of research and
 How could it inform decision making for:
access to information used  A discount supermarket such as Lidl or Aldi
to complete them.
 A leading supermarket such as Tesco

 Summarise what the table shows in 4 bullet points

 USE OF MARKET RESEARCH DATA

The table shows market

share of supermarkets Market size is the total size of
in the UK in 2016. the market. This can be shown
The size of the UK either in value e.g. £s or volume
supermarket industry e.g. tonnes.
was approximately
£160 billion.
Market share is the percentage
any one business controls in the
Draw a chart to show market e.g. in 2016 Tesco
current market share in controlled 28% of the UK
the UK or another
country. You will need supermarket industry.
to carry out some
research. Market share is calculated by
the formula:
Sales of one company
Total sales x 100
 MARKET RESEARCH

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You have 30 seconds to write down as many terms as you can think of that are linked to market research, starting from
NOW!
 4.1 MARKET RESEARCH

 IN THIS UNIT YOU HAVE LEARNT ABOUT:

 The purpose of market research:
 to identify and understand customer needs
 to identify gaps in the market
 to reduce risk
 to inform business decisions

 Methods of market research:

 primary research:
 survey
 questionnaire
 focus group
 observation
 test marketing
 4.1 MARKET RESEARCH

 IN THIS UNIT YOU HAVE LEARNT ABOUT:

 Methods of market research:
 secondary research:
 internet
 market reports
 government reports

 The use of data in market research:

 qualitative and quantitative data
 the role of social media in collecting market research data
 the importance of the reliability of market research data