4.

4  
Marketing  

Introduction

● Market research: The process of collecting, recording and

analysing data about customers, competitors and the market.

Primarily used to predict and anticipate consumer behaviour

towards;

● Differing price levels,

● Alternative forms of promotions,
● New types of packaging,
● Different methods of distribution.

Why organisations carry out market research

1. To reduce the risk associated with new product launches

● Analysis of whether NPD (New Product Development) will be
taken successfully by consumers or not.

2.​ To predict future demand changes

● Investigation into social changes and societal behaviour and then
tailoring product and service development in line with the findings
Why organisations carry out market research

3. ​To explain patterns in sales of existing products and market

trends

● Used to not only release a new product, but to maintain and

● improve existing products’ performance.

4. ​To assess favoured designs, flavours, styles, promotions and

packages for a product

● Market size, consumer tastes and trends

● The product and its perceived strengths and weaknesses
● The promotions used and its effectiveness
● Competitors and their claimed USPs
● Distribution methods most preferred by consumers
● Consumers preferences for packaging the product.

Methods of market research

● Primary research ​– the collection of first hand data that are directly related to a firm's
needs
● Secondary research –​ Collection of data from second hand sources
● Qualitative research​ – Research into the in depth motivations behind behaviour or
opinions
● Quantitative research ​– Research that leads to numerical results that can be presented
and analysed

Methods of market research

Methods of primary market research

● Surveys

Quantitative ​– Information is analysed statistically such as

average spend per week that people within a specific age range
on the market being researched.

Qualitative ​– Information on the thought processes of consumer ​behaviour. It develops

understanding of consumer preference and establishing a brand loyalty from consumers. A wide
range of participants is important to reduce sampling
error

Unbiased and avoidance of leading questions.

Open ended vs closed questions.
Methods of market research

● Interviews

● Face to face or telephone interviews of the target market.

● Allows the interviewer to go into more detail with participants.

● It also reduces the risk of inaccurate responses as the interviewer

can assess validity more accurately

● An expensive form of market research that can be quite time

consuming for the business.

Methods of market research

Methods of primary market research

● Focus groups – A group of people who are asked about their

attitude towards a product, service, advertisement or new style of
packaging.

● Group based discussion from the focus group on a range of open

ended questions posed by the business.

● Can often provide more detailed information on a product

● Is vulnerable to biased conclusions as the creation of business

questions can sometimes influence the focus group towards a
particular conclusion.
Methods of primary market research

● Observations– Information gained by observing customers and

potential customers.

● Observational technique:

● Informally, observations through conversations or general

awareness can inform a market researcher of the demand of a
particular product.

● Formal observations involve the active participation of market

researchers watching consumer behaviour and trends towards
particular products that they buy.

Methods of primary market research

● Test marketing – marketing a new product in a geographical region

before a full scale launch of the product.

● Reduces the risk of failure on a larger scale

● Dependant on the cohort of people used in the test marketing

sample. If the cohort’s characteristics do not share the same
characteristics of the overall population then the test marketing
will give an inaccurate forecast.
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Methods of primary market research

Disadvantages of secondary data:

● Its never completely up to date

● Does not always answer the specific questions that the business
requires
● Is available to competitors too

Methods of secondary market research

● Sources of secondary data:
● Market intelligence analysis reports
● Academic journals
● Government publications
● Local libraries and government offices
● Trade organisations
● Media reports and specialist publications
● Internal company records
● The internet
Advantage and Disadvantage of secondary market research
Twitter case study

Twitter was started in July 2006 by a partnership between Jack Dorsey,

Evan Williams, Biz Stone and Noah Glass. By May 2015, Twitter had
more than 500 million users and a revenue of $2.21bn. It is said that the
Twitter concept came from a brainstorming session led by Jack Dorsey
and what followed was a considerable amount of primary and
secondary research into the potential of a new social media concept.

Ethical considerations of market research

● Confidentiality ​– Personal information shared in primary market

research can often be passed on or sold to another organisation

● Disruption ​– Primary research techniques such as cold calling can

be invasive and badly received by the general public

● Plagiarism​ – Market research techniques may require the use of

another organisation, this can often happen without that business’
permission

● Bias​ - Interpretation of data will inevitably vary, sometimes, the

conclusion of the report is subject to the bias of the person(s) doing
the interpretations.

Sampling in market research

● Sampling​ – Where a business selects a group of people to be part of

primary research that represents the market that the business is
targeting.

● The larger the sample used, the more accurate the results of the
sample tend to be.

● Sampling error​ – Errors in research caused by using a sample for

data collection rather than the entire target population.

● Errors can be sampling size, the types of people in the sample size,
location of research, questions or techniques used to obtain answers.
Sampling in market research

Fujitsu case study – Use notes on HOW to help

The IT specialist Fujitsu uses focus groups extensively as part of its

market research, running focus group sessions with key customers over
breakfast, lunch or dinner. They float an idea and have a conversation
around what the group thinks of it. Sampling the business people to be
part of these groups is a key part of the strategy.

Results from data collection

More often than not, the effectiveness of market research will come
down to way in which it is presented and analysed.

Results from data collection

More often than not, the effectiveness of market research will come
down to way in which it is presented and analysed.
Results from data collection

More often than not, the effectiveness of market research will come
down to way in which it is presented and analysed.

Results from data collection

More often than not, the effectiveness of market research will come
down to way in which it is presented and analysed.

Results from data collection

Activity 4.4.7 – Market research dilemma at GCB Ltd