Marketing Research

GCSE Business Studies

tutor2u™ Revision Presentations 2004
 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
define the problem
Research plan should aim to Define Research Objectives
be cost-effective
Choose between primary and Choose Data Sources
secondary sources
Use appropriate research Choose Research Methods
tools and methods
Design the sample with care Construct Sample
Research needs to be closely
managed 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 Secondary
Sources Sources

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 Primary Research
Primary market research doesn’t 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

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