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Market researchMarket research

THE TIMES 100

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THE TIMES 100

Market researchMarket research

Market research is the process of gatheringand interpreting data about customersand competitors within a firms targetmarket.

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Purpose of market researchPurpose of market research

Market research is carried out to:Help firms make marketing decisionsReduce risk

Data may be gathered for different reasonse.g. to identify current and future needs

of consumers, the price customers willpay for a product or the success of apromotional campaign.

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Primary researchPrimary research

Primary research involves finding out new,first-hand information. This is calledprimary data.

Methods of primary research include:Questionnaires

Focus groupsObservation

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Primary researchPrimary research

Benefits Drawbacks

Directly relevant to thebusiness

Up-to-date data obtained

Competitors do not have

access to the findings

Time consuming

Often expensive

Results may bemisleading if the sample

size is too small,questions are unclear orthere is interviewer bias

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THE TIMES 100

Secondary researchSecondary research

Secondary research involves gatheringexisting information. This is calledsecondary data.

Sources of secondary data include:Market research reports

Trade journalsGovernment statisticsSales and customer records

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Secondary researchSecondary research

Benefits Drawbacks

Often quick and easy tocollect

A wide range ofsecondary data isavailable, especially on

the internet

Data may not be reliableor up-to-date

May not be totallyrelevant

May not be in a form thatis easily interpreted andanalysed

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Quantitative researchQuantitative research

Quantitative market research involvesfinding numerical data

Quantitative data is generally collectedfrom large samples and is easy to analyse

Methods of collecting quantitative datainclude written and online questionnaires

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Qualitative researchQualitative research

Qualitative research involves finding outopinions, attitudes and feelings

Often more useful than quantitative databut is more difficult to collect and analyse

Methods of collecting qualitative datainclude focus groups & in-depth interviews

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SamplingSampling

Sampling is the method of choosing asmaller, representative group ofrespondents with which to conductresearch instead of the whole population.

Sampling reduces the cost and time to

carry out research. Careful sampling canprovide reliable data about the population.

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Sampling methodsSampling methods

Random sampling

Everyone in the population has an equal chance of being chosen to bein the sample.

Quota samplingPeople in the sample are chosen to reflect the proportions of differentgroups in the target market e.g. 80% over 60s, 20% under 60s whenresearching the market for mobility aids.

Stratified sampling

The appropriate market segment is first selected, for example marriedmen, then the sample is randomly selected from this segment.

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Sampling methodsSampling methods

Cluster sampling

This uses random sampling from a specific area or cluster e.g. touristtowns when researching leisure hotels.

Convenience sampling

This simply means using a sample of willing volunteers. This methodoften results in bias and may only produce small samples.

Systematic sampling

Every nth person is selected from a list of the population. This can be

costly if the sample is widespread.

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Reliability of samplingReliability of sampling

The larger the sample size, the morereliable it is likely to be. However, largersamples incur greater costs.

A 95% confidence level is usually expectedwhen conducting research. This means

that findings are likely to be correct 19times out of 20.

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Market research in contextMarket research in context

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Market research at KelloggsMarket research at Kelloggs

Kelloggs is a market-orientatedorganisation, not a product-orientatedone. Why is it so important for a market-orientated firm like Kelloggs to conductmarket research?

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Types of market researchTypes of market research

Kelloggs used mainly primary researchwhen developing Crunchy Nut Bites. Whydo you think this was favourable to

secondary research even though it istime-consuming and expensive?

Use the Kelloggs case study to help you.

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Market research & new productMarket research & new product

developmentdevelopment

Kelloggs carried out both quantitative andqualitative market research throughoutthe development of Crunchy Nut Bites.

Give one example of each of thesemethods as used by Kelloggs and state atwhich stage it was used.

Use the case study to help you.

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Useful resourcesUseful resources

Market research lesson suggestions andactivities (The Times 100)

Kelloggs case study (The Times 100)Kelloggs website