Market research methods and use

B2

Market research methods and use

Recap:

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Write a definition of:

• Market research
• Primary market research
• Secondary market research

MAKE NOTES ON THE FOLLOWING SLIDES AND READ THE ARTICLES AND ANSWER THE QUESTIONS!

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Market research methods and use

• In this topic you will learn about
• Primary research, to include surveys, interviews, observations, trials, focus groups
• Secondary research:
• Internal – business data on customers and financial records to include loyalty cards and sales records
• External – commercially published reports, government statistics, trade journals, media sources
• Importance of validity, reliability, appropriateness, currency, cost
• Quantitative and qualitative data, when and where used
• Sufficiency and focus of the research
• Selection and extraction

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Primary market research

• Examples of primary market research include:
• Surveys – a series of short open and closed questions asked to existing or potential customers
• These can be postal, telephone, face–to-face or on-line
• Interviews – a two way process of asking more open questions and follow up questions
• Allows for a greater depth of understanding into the reasons for consumer behaviour and attitudes
• Observations – watching the actions of consumers e.g. routes taken around a store, eye positioning, time taken to make decisions
• Counting footfall e.g. the number of people who walk past a store and the percentage that enter at different times of day
• Characteristics of shoppers e.g. age, gender, families, groups
• Provides quantitative data only, not any understanding of the reasons for behaviour

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Primary market research

• Examples of primary market research include:
• Trials – testing a product either during or after development to a small section of the market
• Feedback from a test market can be used to inform decisions before a complete rollout takes place
• For example, in technology beta testing is normally used as a trial to iron out any glitches in software
• Focus groups – collecting feedback from a group of people who try a product and then discuss opinions
• Normally an experienced marketer will lead the focus group to ask structured questions, facilitate discussion and try to reduce bias

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To what extent do you think focus groups are an effective method of primary research for all products and services?

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Secondary market research

• Internal sources of market research include:
• Data on customers e.g.
• Customer profiles e.g. age, occupation, location
• Feedback from post sales surveys
• How they heard of you, use of promotions e.g. coupons
• Financial records
• Annual accounts e.g. trends in profit or loss, value of assets, cash flow
• Whole company and divisional performance e.g. product lines or branches
• Loyalty cards
• Data on individual customers e.g. frequency of shopping, average spend, popular items
• Identify lifestyle choices
• Sales records
• Trends by day, week, month and year
• Popular and less popular products

How can Morrison’s use their loyalty card to collect market research?

Secondary market research

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• Examples of external secondary market research include:
• National and Local Government e.g. Office for National Statistics
• Market research organisations e.g. MORI, MINTEL
• Professional bodies e.g. ACCA
• Professional magazines e.g. Dentistry today, The Times Education Supplement
• Trade unions and Confederation of British Industry (CBI)
• International bodies e.g. EU, OECD
• Academic organisations e.g. universities
• Newspapers and magazines
• The Internet

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TASK - Classify each of these sources as either:

• Commercially published report

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• Government statistics

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• Trade journals

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• Media source

Homework: Read the link below and analyse the usefulness of these market research findings.

Identify how one of the businesses could alter their marketing in response to the research.

Next lesson - Wednesday 28th November

Importance of validity, reliability, appropriateness, currency, cost

• Market research is used to inform decision making e.g. what price to charge or who to target
• Therefore it is important that it is as accurate as possible. This can be helped by applying the following checks:
• Validity
• Check the source of the data to ensure it is valid, this may include expertise, not biased and traced to the original source
• Reliability
• Looks at how the research was collected and the consistency of the methods
• Appropriateness
• Questions whether the research is fit for purpose and whether it was collected in an appropriate way e.g. without causing distress or with the permission of contributors
• Currency
• Whether the data is up to date
• Cost
• Market research must be carried out within the agreed budget and not incur excessive costs in relation to the value of the results to the business

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�Qualitative and quantitative data�

• Qualitative research is the gathering of non-statistical information that gives a company in depth insight into the reasons for human behaviour
• Quantitative research is the gathering of statistical data to inform the company about people’s behaviour but does not identify the reasons

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To what extent do you think quantitative data is more useful than qualitative data in informing marketing decisions?

Homework

3 challenging questions based on slides 1-9 - deadline tomorrow Period 1 :)

In pairs – complete the table below using the bullet points and your notes from B1 on the purpose of researching information

• identify and anticipate customer needs and wants
• quantify likely demand
• gain insight into consumer behaviour

How can each type of research data be used by businesses? For example, can primary quantitative data from a survey identify and anticipate needs and wants?

Sufficiency and focus of the research

• Businesses cannot ask for the opinions of all potential customers and therefore try to choose a representative sample

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• A sample is a group of subjects that has been chosen from a larger group, the population, for investigation

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• The sufficiency of the research will depend upon:
• The sample technique used
• How the sample was carried out
• The size of the sample

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• If the sample size is too small then the data will be insufficient to reach any valid conclusions

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• The research must have a clear focus set out through research objectives and a research brief

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Homework - revise

Selection and extraction

• Market research creates data i.e. raw facts and figures or qualitative opinions
• Information exists when this data is given meaning
• Turning data into information involves selection and extraction
• Selection – reducing the amount of data down to what is of real use
• Extraction – pulling meaning from the data through the manipulation of the data
• Identify trends
• Produce statistics
• Represent diagrammatically e.g. pie charts or scatter graphs
• Categorise opinions

• In this topic you have learnt about
• Primary research, to include surveys, interviews, observations, trials, focus groups
• Secondary research:
• Internal – business data on customers and financial records to include loyalty cards and sales records
• External – commercially published reports, government statistics, trade journals, media sources
• Importance of validity, reliability, appropriateness, currency, cost
• Quantitative and qualitative data, when and where used
• Sufficiency and focus of the research
• Selection and extraction

Market research methods and use

Create 3 challenging questions based on this PP and assess one another’s knowledge and memory!