Market

Research
Chapter 11
IGCSE Business Studies
Presented by: IRAM JAMIL

Presented by: IRAM

This chapter will explain:

• The importance of market research

• What is meant by primary research

• What is meant by secondary research

• Who carries out this research

• Why the information collected may not be accurate

• Presentation and use of market research results

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Product orientation
A product-oriented business is one
whose focus of activity is product
itself.
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 Product orientation

• Some businesses produce the product first and then try to find a market for it.

• Not common today

• Such businesses often produce basic necessities required for living such as
agricultural tools or fresh food.

• May not have their own brand name or brand

• Many new technologies are developed without first investigating possible markets.

• After development – advertisement to persuade people to buy it.

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 Market orientation

A market oriented business is one which

carries out market research to find out
consumer wants before a product is
developed and produced.

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 Market orientation

• Market Orientation is based on market research

• focused on : 1. identify wants and desires of customers both now and future

2. what customers are willing and able to buy

• information about customers, their tastes and preferences, market condition and competitors’ actions

• Marketing budget

• Cannot afford to produce and hope they will sell without carrying market research

• Better able to survive and successful – more prepared for changes

• take advantages of market opportunities

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Presented by: IRAM
Marketing budget

A marketing budget is a financial plan for

the marketing of a product or product
range for some specified period of time.

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 Market
research

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 Market Research

It is a process of gathering,
analysing and interpreting
information about the market.

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 Primary research: also known
as field research

Market research

Secondary research: also

known as desk research

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 Market research

Primary research is the collection and collation of original data via direct contact with potential or
existing customers.
- Expensive way to collect the data
- Usually for a specific purpose

Secondary research is information that has already been collected and is available for use by others.
- May be from either internal sources or external sources

Presented by: IRAM

Presented by: IRAM
 Why is market research needed?

• A business need to find out people willingness to buy a product.

• Huge amount of money could be wasted producing something that not many people will
buy leading to bankruptcy.

• Identify consumer needs in changing and competitive international environment.

• To reduce the risks associated with new product launches

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 Types of information

• 1. Quantitative information: which answers questions about the quantity of

something.

• 2. Qualitative information: which answers questions where an opinion or

judgement is necessary.

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 Primary
research

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 Primary
research:
1. Questionnaires
2. Interviews
3. Focus groups
4. Observation
Questionnaires, focus groups and interviews are all
different types of surveys.
Presented by: IRAM
 Questionnaires

• A questionnaire is a set of
questions to be answered as a
means of collecting data or
market research.

• Questionnaires may be
conducted face-to-face (in the
street), by telephone, by post
or on internet.
Presented by: IRAM
Presented by: IRAM
Presented by: IRAM
 Questionnaires

• Online surveys can be carried out on

specialized websites.
• These allow researchers to put a
questionnaire on the website,
• Go and fill.
• Deciding what questions to ask is
difficult.
• Some questions may not be very clear.
• Misleading answers
• Who to ask?

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Advantages of questionnaires

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Disadvantages of questionnaires

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 Interviews

• The interviewer (the person asking the

questions) will have ready-prepared questions
for the interviewee (the person answering the
interview)

• Can be carried out with one person or in

groups (less expensive than asked
individually but people will be influenced by
what others are thinking.)

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Advantages & disadvantages of Interviews

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Sample: A sample is the group of people who are selected to respond to a
market research exercise, such as questionnaire.

Random sample: when people are selected at

random as a source of information for
market research

Sample

Quota sample: when people are selected on

the basis of certain characteristics as a
source of information for market research

Presented by: IRAM

 Random sample

• Every member of the population has an even

chance of being selected.

• People are selected at random.

• Advantage: Everyone has an even chance of being

picked.

• Disadvantage: Everyone in the population may

not be a consumer of the particular product being
investigated.
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Focus group

A focus group is a group of people who

are representative of the target market.

• This is where group of people agree to

provide information about a specific
product or general spending patterns
over a period.

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Focus group

• Groups may also test new products and

discuss/explain what they like and
dislike about them.

• It helps in product development and

sales

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Advantages & disadvantages of
focus group

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Secondary
research

Presented by: IRAM

 Market research

Primary research is the collection and collation of original data via direct contact with potential or
existing customers.
- Expensive way to collect the data
- Usually for a specific purpose

Secondary research is information that has already been collected and is available for use by others.
- May be from either internal sources or external sources

Presented by: IRAM

Presented by: IRAM
Presented by: IRAM
 Internal sources of information:
A lot of information may be readily and cheaply available from the firm’s own records.

Sales department’s sales records,

pricing data, customer records, sales Opinions of distributors and public
reports, which product selling well relations officers
in which area

Finance department gives detailed

information on costs of
Customer Services department
manufacturing products or
providing services

Presented by: IRAM

 External sources of information
Market research agencies:
Government statistics: will
these agencies carry out market
have detailed information about
research on behalf of the
populations and age structures in
company and provide detailed
the economy.
reports.

Internet: will have a wide range

Newspapers: articles about
of articles about companies,
economic conditions and
government statistics,
forecast spending patterns.
newspapers and blogs.

Trade associations: if there is a

trade association for a particular
industry, it will have several
reports on that industry’s
markets.
Presented by: IRAM
Presented by: IRAM
 Secondary research is much
cheaper way of gathering
information as research has
already been done by others.

Benefits of
It may be needed to help assess
secondary the total size of the market
research

To find out size of population and

its age structure

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 Who carries out market
research?

- Businesses can
- Specialist market
carry out their
research agency
own research

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 Accuracy of
market research
data

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 How carefully the sample was drawn up, its size, the types of people selected etc.

How questions were phrased in questionnaires and surveys to ensure honest responses

Bias: newspaper articles are often biased and may leave out crucial information deliberately.

Age of information: researched data shouldn’t be too outdated. Customer tastes, fashions, economic conditions,
technology all move fast and the old data will be of no use now.

Who carried out the research: secondary research is likely to be less reliable since it was drawn up by others for different
purpose at an earlier time.

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 It is
Important
To know your
audience

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 Presentation of data from market research

Different data handling methods can be used to present data from market research.
This will include:
Tally Tables: used to record data in its original form. The tally table below shows
the number and type of vehicles passing by a shop at different times of the day:

Presented by: IRAM

 Presentation of data from
market research

Charts: show the total figures for each

piece of data (bar/ column charts) or the
proportion of each piece of data in terms
of the total number (pie charts). For
example the above tally table data can be
recorded in a bar chart as shown:
The pie chart above could show a company’s market
share in different countries

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 Presentation of data from market research

Graphs: used to show the relationship between two sets of data. For example how
average temperature varied across the year.

Presented by: IRAM

Presented by: IRAM