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GCSE Business Studies

Revision Presentations 2004
Marketing Research
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GCSE Business Studies
Purpose of Marketing Research
Businesses need accurate & up-to-date information because
the business world is always changing around them
Changes in technology
Changes in customer tastes
Changes in competitor products
Changes in economic conditions
How marketing research can help
Gain a more detailed understanding of consumer needs
Reduce risk of product / business failure
Help anticipate / forecast future market trends

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Information a Business Needs
Who are our customers?
How do customers make buying decisions in our market?
How well are our products selling?
What are our competitors doing?
How can / should we respond to changes in the marketplace?
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Main Sources of Business
Information
Internal company information
Sales, orders, customer profiles, stocks, customer contact
Marketing intelligence
Everyday information about developments in the market
Suppliers, customers and distributors
Bought from specialist business intelligence providers (e.g.
Mintel)
Market Research
Commission specific studies to obtain data
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Marketing Research Process
Important to understand and
define the problem
Research plan should aim to
be cost-effective
Choose between primary and
secondary sources
Use appropriate research
tools and methods
Design the sample with care
Research needs to be closely
managed
Define the Problem
Define Research Objectives
Choose Data Sources
Construct Sample
Choose Research Methods
Set Budgets / Deadlines
Get Started!
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Uses of Marketing Research
About the market
Market potential for new products | Forecasting future demand |
Competitor behaviour and performance | Market shares
About products
Likely customer response to new products | Comparison of existing
products in the market (features, costs etc) | Forecasting new uses for
existing products | New product development
About promotion
Effectiveness of advertising | Effectiveness of direct marketing and/or
the sales force | Competitor promotional strategies
About distribution
Use and effectiveness of each distribution channel | Opportunities to
sell direct | Cost of transport & warehousing products
About pricing
What happens to demand following changes in price | Analysis of
impact of changes in price on costs and profits | Customer perceptions
of pricing
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Quantitative Research
Quantitative marketing research is all about numbers!
Quantitative research tires to get hold of statistically valid,
numerically measurable data
Usually related to data on the market (e.g. size, growth and
market shares)
Usually obtained via surveys
Concerned with obtaining hard data to answer questions
such as:
How many?
How much?
How often
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Qualitative Research
Qualitative research is quite different from quantitative
research
It is concerned with finding out soft information
Main purpose to understand consumer behaviour, attitudes
and perceptions
Obtained by methods designed to get detailed responses
e.g. interviews and focus groups
Qualitative research topics usually explored in some depth
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Two Sources of Research Data
Primary
Sources
Secondary
Sources
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Primary Research
Primary market research doesnt exist until it is collected for
the first time
It involves collecting data for the first time and for a specific
purpose
Can be carried out by a business itself or by a specialist
market research organisation
Expensive to obtain but should be up-to-date and exclusive
Obtained by several methods:
Observation
Focus groups
Experiments
Surveys
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Secondary Research
The difference with primary research is that Secondary Data
already exists
Has been collected by someone else for another purpose
Can be obtained from internal data sources
E.g. records of transactions by the business; sales and activity reports
Should always be considered first, because cheap, quick and convenient
May be out of-date or not relevant to a new product
Also many external sources of secondary data
Commercial market research organisations (e.g. Euromonitor)
The government (substantial and usually free)
Competitors (e.g. accounts, web sites)
Trade publications / magazines
Industry associations (conduct general research for members)
General media

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Observation
Method to obtain primary research data
Involves watching people behave, noting and analysing their
reactions
Can be carried out:
Under controlled conditions (laboratory)
In real-life situations (the field)
Common observational methods
Traffic audits
Television and radio panels
Retail store audits
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Focus Groups
Method of obtaining primary research data
Used to gather qualitative information
Involves a small group of people (6-10)
Group spends time with a moderator to discuss their opinions
and attitudes to a topic / product
Objective to obtain detailed responses
Role of the moderator is crucial:
Unbiased
Should carefully guide the conversation
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Experiments
Method of obtaining primary research data
Aim to measure ad evaluate customer reactions to changes
in the marketing mix
Can be done under controlled conditions or in the field
Pilot trials of new products and services are a common use of
experiments
Lower profile
Chance to test whether things work before larger-scale roll-out
Reduces risk and uncertainty
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Surveys
Key research method to obtain information from large
samples
Wide range of uses ascertain facts, beliefs, opinions,
attitudes
Various methods to complete surveys:
Interviews
Telephone
Face-to-face
Postal
Online
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Continuous, Ad-hoc & Omnibus
Three other research methods
Continuous research
Carried out on an ongoing basis (e.g. every day / week / month)
Gathers data to illustrate trends (e.g. consumer buying habits)
Example: consumer panels (National Readership Survey)
Ad-hoc research
Carried out on a one-off basis
Designed to meet research needs of a business at a specific
moment
Can vary widely in terms of objective, scale, scope and cost
Omnibus research
Involves several businesses contributing their own questions to
a multi-part survey
Can be more cost-effective for smaller firms
Wide range of omnibus surveys available (e.g. Mori omnibus)
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Questionnaires - Introduction
The most common method for collecting primary research
data
What is a questionnaire?
A series of questions used to collect data from a specified
number of respondents
Can be self-completed (by respondent) or on their behalf
Requires careful design to be effective
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Sampling in Market Research
Small section of population is asked a number of questions or
is given opportunity to use a sample of product to indicate
what whole population would think about product
Methods
Quota sampling asking people who have certain
characteristics (e.g. aged between 18-25)
Random sampling everyone has an equal chance of being
asked a question
Stratified sampling population is segmented by a common
characteristic
Cluster sampling target population is divided into groups
(normally by geographical region) and random sample taken
from these groups