Market Research

Presented by: Mr Silvanus.

MARKET RESEARCH:
Market research is the process of gathering,
analyzing and interpreting information about
market.
Market research is needed to answer the following
questions:
1. Would customers be willing to buy my product?
2. What price would they be prepared to pay?
3. Where would they be most likely to buy my product?
4.What feature of my product do customers most like or dislike?
5. What type of customer would buy my product?
6. What type of promotion would be effective with these types of
customers?
7. How strong is the competition and who are the main competing
businesses
The role of market research/uses of market research
i. To Identify consumer needs.
ii. To Discover the current and future market size for the product.
iii. To collect information about the business’s existing products and markets.
iv. To Identify the strengths and weaknesses of competitors products.
v. To Decide the best ways to price, promote and distribute the products to
the customers.
vi. To Predict how changes and trends in consumer tastes and fashion may
affect the future demand for products.
 Marketing Orientation / Approach
Refers to the philosophy or concept that an organisation’s
marketing and selling activities should be carried out.
 Types of market orientation
 Product orientation
 Market orientation
 Production Orientation
 Sales orientation
 Product-Orientation
•Some businesses produce the product first and then try to find a
market for it.
This is known as being product-orientated.
Product – orientated businesses often produce basic necessities
required for living, such as agricultural tools or fresh foods.
 Examples of product oriented companies
There are numerous examples of companies that take this
approach.
Notable examples include; fast-food chains such as Burger King or
McDonald's, which focus on producing high quantities of fast food
at the lowest price possible.
Another example is the Ford Motor Company.
Advantage of Product Orientated
a) It is less expensive as no market research is carried out.

Disadvantages of Product oriented

b) Some of the goods may not be sold because it may not be
customers choice
c) The business may suffer loss.
 Market-Orientation
>A market orientated business is one which carries out market
research to find out consumer wants before a product is
developed and produced.
>It requires businesses to have marketing budget.

Market orientation is an approach to business that prioritizes

identifying the needs and desires of consumers and creating
products and services that satisfy them
Advantages Of Market Oriented.
Product last longer in the market and this increase sales and profit
Goods can be entered in the market with the confidence.
The risk of new products failing is reduced

Disadvantages Of Market Oriented

Conducting market research may be expensive.
Time consuming.
Production Orientation
This orientation approach assumes that its customers value
price, and therefore focus on lowering costs to meet such
price needs of customers.
Advantages of product orientation
Large scale production
Low cost to customers
Disadvantages of production orientation
Set up costs are usually high
Sales orientation
This orientation focus on selling of the product and services to its
target group. Sales is a priority of the organisation.
Advantages of sales orientation
 immediate short term sales are generated

Disadvantages of sales orientation

 risk customer confidence
Costs e.g. advertisement costs
Not always sustainable
 Case Study:
Joshua invents a new tool for planting seeds. It is much
easier to use than existing tools. However, it has high
manufacturing costs, twice as much as existing tools.
Activity 11.1 Read the case study above.
(a) Is Joshua’s business product-orientated or market-orientated? Give reasons for your
answer.
(b) What would you advise Joshua to do before he starts to manufacture the new tool?
Explain your answer.
RESEARCH DATA/ INFORMATION
Types of research information
Quantitative information, which answers questions about
the quantity of something, for example, ‘How many sports
shoes were sold in the month of December?’ or ‘What
percentage of children drink sugar-free cola?’
Qualitative information, which answers questions about
quality, where an opinion or judgement is necessary, for
example, ‘What do customers like about a particular
product?’ or ‘Why do more women than men buy the
company’s products?’
Types Of Market Research
1.PRIMARY RESEARCH or field research
2.SECONDARY RESEARCH or desk research
Primary Research
Primary research is the collection of original data via
direct contact with potential or existing customers.
this is also known as FIELD RESEARCH.
 Advantages of Primary Data
Answers a specific research question
Data are current
Source of data is known
Secrecy can be maintained
Disadvantages of Primary Data
It can be expensive, for example individually interviewing many people.
It takes time to collect.
Process/Stages of primary market
research
1. Identify the purpose of market research
2. Decide on the most suitable method of market research
3. Decide the size of sample.
4. Carry out the research.
5. Collect the data.
6. Write the report of the findings.
Methods Of Primary Market Research
>>Questionnaires
>>Online surveys
>>Interviews
>>Focus groups
>>Observation
1. Questionnaire
Set of questions to be answered as a means of collecting data.
Questionnaire may be conducted face to face for example in the street , by
telephone , by post or the internet .
How to design and use a questionnaire?
Firstly, you need to ask yourself some questions:
What do I need to find out?
Who do I need to ask?
Where will I carry out my questionnaire?
Advantages Of Questionnaires
i. Help to collect data with more details
ii. Easy to gather information from a large audience.
iii. Affordable ways to gather quantitative data.
iv. Customers opinion about the product can be
obtained.
v. They can be carried out online, which make it
easier and cheap to collect/present results
 Disadvantages Of Questionnaires
i. If the questions are not good the answers could be
inaccurate.
ii. May result to collection of dishonesty answers
iii. Time consuming in terms of collecting and analyzing
results
iv. There may be different interpretations of your questions
v. As with any sort of research, respondent bias can be an
issue.
2. Online Survey
These can be carried out on specialized
websites using any internet connected
device, including mobile phones.
Advantages Of Online Surveys
Fast, with quicker response times than other forms of
survey.
Cheaper than interviews or postal questionnaires.
Easy to complete for the participant.
Data collected can be quickly presented and analyzed
using IT tools.
Disadvantages Of Online Surveys
 Absence of interviewer to explain open-ended questions
or to ask follow-up question to gain more detailed
information.
Cannot reach potential respondents who do not have
access to the internet.
Scope for fraud – some people will just answer an online
survey to gain any incentives being offered and not give
honest answers, or they complete the survey carelessly
3. Interview
This is a structured way of asking questions on face to face
to potential client or customer.
Advantages of interview
1. The customer is able to explain any question in
details.
2. Detailed information can be obtained.
3. Capture verbal and non-verbal ques.
Disadvantages of interview
1. Time consuming
2. They require a staff of people to conduct the
interviews, which means there will be personnel
costs.
3. The interviewer can lead to a wrong answer.
4.Focus Groups
This is where groups of people (focus groups) agree to provide
information through a group discussion with a researcher.
Advantage of focus groups
◦ They can provide detailed information about the consumer’s
opinions
◦ Quicker and cheaper than individual interviews.
Disadvantages of focus groups
◦ Time-consuming
◦ Expensive
◦ Opinions could be influenced by others in the group.
5.Observation
Watching, counting etc.. in order to get information for market
research.
Advantage of observation.
1. Not expensive way of collecting data.
2. It doesn’t need much skills
Disadvantages of observation.
3. Information only gives figure not exactly data.
4. You may collect wrong data.
5. boring ◦ .
SAMPLI
NG
SAMPLING
Sample is a selected of a population that is used to
represent the entire group as a whole.
The process of Selecting a sample from a population is
called sampling.
 A sample size is a total number of subjects (clients)
selected from a whole population for purpose of being used
in research
Common Methods of Sampling
A. Random Sampling
B. Quota Sampling
Random sampling
This occurs when every member of the population has the
same chance of being selected. People are selected at random
(often by computer), for example, every hundredth name in a
telephone directory.
Advantages of random sampling
 Everyone has an even chance of being picked
 Requires little advance knowledge of the population

Disadvantages of random sampling

 May not capture a specific group since not everyone in the population
may be a consumer of the particular product being investigated.
 May not be efficient
Quota sampling
This occurs when people are selected on the basis of
certain characteristics, for example, age, gender or income.
Researchers are given a quota.

For example, they may be required to interview 20 people

from the age group 10–25, 30 people from the age group
26–45,
Advantages of quota sampling
Quota sampling makes the interpretation of information
convenient for the researcher.
it saves a lot of time for the researcher.
Less cost is incurred
Disadvantages of Quota sampling
May result in sampling bias
Research result may be not accurate
Why sampling is important?
•It saves time, which could be used to interview the whole
population.
•Cost reduction, The collection of data by interviewing the
whole population might be more cost full.
•Accurate, researching a sample may be more accurate
than the whole population
SECONDARY
RESEARCH
 SECONDARY RESEARCH
The collection of information that has already been made
available by others. Second-hand data about consumers and
markets is collected from already published sources.
Source of Secondary Research
There are two sources of secondary research;
A. Internal sources;
sales department
finance department
customer service department.
External sources
Government statistics: will have information about populations and
age structures in the economy.
Newspapers: articles about economic conditions and forecast
spending patterns.
Trade associations: if there is a trade association for a particular
industry, it will have several reports on that industry’s markets.
Market research agencies: these agencies carry out market research
on behalf of the company and provide detailed reports.
Internet: will have a wide range of articles about companies,
government statistics, newspapers and blogs.
Advantages Of Secondary Data
Saves time and money
Aids in determining direction for primary data
collection
Serves as a basis of comparison
for other data
Disadvantages Of Secondary Research
Data may have been collected several years ago and
be out of date.
 Data is available to all businesses – not just
collected for the sole use of one business.
 Data may not be completely relevant as it was not
collected with the needs of one business in mind
What Makes A Market Research Information To Be
Inaccurate
1. Outdated information
2. Poor designed questionnaire
3. Biasness from news papers, articles
4. Poor selection of Sample size
Presentation Of Data/Research Information
When information has been gathered must be presented to make a
meaningful research.
The data can be presented by the following methods;
1. Table or tally.
2. Chart
• Bar chart
• pie chart
3. A Graph
1. Table or Tally chart
Advantages of tables or Tall chart
i. Used to record the data in its original form.
ii. Large amount of data can be grouped and presented
more clearly.
iii. It is easy to extract numerical data..
Disadvantages Of Tables or Tally chart
i. They lack visual impact.(no images)
ii. Too much data in the table can make it difficult for
users to understand.
2. A pie chart.
Shows the total figure for each piece of data in terms of
total numbers. E.g. if the products are normally sold out to
different countries the chart will show the percentage of
each country.
E.g. pie charts
Advantages of presenting data in pie chart
i. Can be used for comparison purposes
ii. Easy to interpret and analyze as every item has its portion within a
circle.
Disadvantages of pie chart.
iii. it is difficult to see the relative importance of different parts of
data if there are many column.
3. A bar graph or bar chart
Advantages
i. Large amount of data can be grouped and presented more
clearly
ii. It is easy to extract numerical data.

Disadvantages
iii. Too much data in the table can make it difficult to understand.
 4.Line graphs
Graphs show the relationship between two variables. It
can be drawn in a straight or curved line. It is usually to
compare things with time and to identify trends.
Advantages
i. They clearly show trends
ii. Data can be added for future time periods.
Disadvantages
iii. They can be difficult to draw and accuracy depends on
choosing appropriate scales for both axes.