MARKET RESEARCH

Market research is when you find out how many people would want to buy the product offered for sale. If there is not a very big market for the product, then a lot of money could be wasted on producing a product which not many people will buy. It could even cause a business to go bankrupt. Therefore, it is very important that market research is carried out very accurately. Usually, market research tries to answer the following questions: What feature of the product do they like/dislike? Are people willing to buy the product? What price are people prepared to pay? Location of the selling point of the product? Type of customer who buys the product? Type of promotion that will be effective? What the competition is like?

Businesses also need to know about the consumer wants to be more competitive. There are two main types of information that can be gathered from market research: Quantitative information: Information about the quantity of something e.g. 'What percentage of teenagers eats a certain type of chocolate?' Qualitative information: Information where an opinion or judgment is necessary, e.g. 'What do customers think about a particular product?' or 'Why do more men than women buy a certain company's products?' Both types of information can be gathered as a result of: Primary research, or field research Secondary research, or desk research Primary research Primary research is the collection and collation of original data. It involves direct contact with potential or existing customers. It will usually be planned and carried out by the person who wants to use the data; it is first-hand. There are various types of primary research: Questionnaires postal, face to face or by telephone Interviews individual face to face or by telephone, group interviews Consumer panels (which are groups of people who agree to provide information about a specific product or general spending patterns over periods of time. Observation recording, watching or audits Experiments (Questionnaires, interviews and consumer panels are all different types of surveys)
Hesham Saleh

The process of primary research 1. Identify the purpose of the market research. (What you want to find out) 2. Decide on the best method of research (primary, secondary or both). The time and cost of the research should be taken into account. 3. Decide on the size and type of sample (group of people who will be asked). (Different segments) 4. Carry out the research. 5. Collate the data and analyse the results. 6. Produce a report of the findings (Summary of findings, conclusions). Should include recommendations of action paths to take based on the conclusions. Methods of primary research Questionnaires Questionnaires form the basis of most primary research. They involve asking people questions. Deciding what questions to ask is difficult since sometimes questions may mislead people and make them answer in a certain way which may not be what they really think. Detailed qualitative information can be gathered. Customers' opinions can be obtained. If the questions are bad they could mislead the customers thus giving inaccurate results. Takes time and money to collate and analyse the results. Interviews Interviews are face-to-face conversations with customers where the interviewer has a set of prepared questions to ask. The interviewer can explain any questions the interviewee does not understand. Detailed information about what the interviewees' opinions about the product can be gathered. The interviewer might unconsciously lead the interviewee to answer in a certain way resulting in inaccurate results due to interviewer bias. Can be time consuming and expensive.

Hesham Saleh

Samples A group of people who are selected to fill in questionnaires or get interviewed. This could be: A Random sample: A random number of people are selected. The advantage is that everyone in the population has an even chance of being picked, but not everyone may be a consumer of the particular product being investigated. A Quota sample: People are selected for some certain characteristics, for example, age, gender or income.

Consumer panels Consumer panels are groups of people who agree to provide information about a specific product or general spending patterns over a period of time. They may even test it and give feedback on their likes and dislikes. Can provide detailed information about consumers' opinions. They can be time consuming, expensive, and biased if opinions of some is influenced by others. Observation This can take the form of: Recording: e.g. meters can be fitted to a monitor to see what people are watching. Watching: e.g. see how many people go into a shop and actually buy something. Audits: e.g. counting inventory to see what has sold well. (inspecting)

It is quite inexpensive. Only provide basic figures and not reasons why people do things. Experiments Experimenting involves giving products to consumers to see what they think about it. Easy to set up, carry out, and gather consumer opinions. People might give wrong feelings to avoid offence. Representatives of samples may not be asked, just people who shop in an area. Many potential customers may not be asked.

Hesham Saleh

As I am starting out, I will need to find out about many things, such as the amount of people that might buy my donuts, the price they are prepared to pay and where would they most likely to buy my donuts (store location). After looking at the different types of primary research, I decided that there are two suitable ways that I could use. Conducting questionnaires is one of them as they are the basis of most primary research. They can give some detailed qualitative information (customers' opinions) about Hole in One's donuts. As I am thinking of locating in Alexandria Sporting Club, the sample that I will select would be a quota sample within the club (different age groups). I will choose my questions carefully to avoid misleading the customers. For example, I could ask some of the following questions: 1. What is your age group? 2. Would you like a new type of desserts store to open in Alexandria which you would buy from? 3. Which of the following do you buy desserts from the most? Sal Sucr Costa Coffee Baskin-Robbins Cinnabon

4. What is the most you would pay for a dessert? 5-10LE 10-15LE 15-20LE

I don't think that interviewing people would be a good idea as unconsciously, I, the interviewer, could lead the interviewees into answering in a way which is not what they really think resulting in inaccurate information. The interviews are also more time consuming to carry out than questionnaires. I will not use consumer panels because I'm going to use questionnaires which will obtain more or less the same type of results. Also, using consumer panels can be expensive, time-consuming and biased if some people in the panel are influenced by the opinions of others. I will not be able to make observations (audits) in other desserts stores as I will not be able to count their stock and even if I did the results will not provide me with any reasons as to why the consumers made these decisions. The second type of primary research that I am going to use is carrying out experiments. I can walk around some streets or in Sporting Club giving out samples of my delicious donuts to consumers to taste. I then ask them for feedback about whether they liked it or not, are they likely to buy from my store when it opens or how the product can be improved. Setting up experiments is relatively easy and a good way of gathering the consumers first reactions to my donuts. I will make sure to go around places at different times in order to maximize the possibility of asking many potential customers to try my new donuts.

Hesham Saleh