Chapter 11 -Market Research

Things you should know after finishing the chapter:
1) What is market research?
2) Why is it important?
3) What is primary research?
4) What is secondary research?
5) Who carries out the research?
6) Possible mistakes in the information collected.
7) Use of information obtained from market research.

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Definitions:
Product oriented business- is one whose main focus of activity is on the product itself.
Market oriented business- is one that carries out market research to find out consumer wants be for a product is developed and produced
Marketing budget- is a plan for the marketing of a product for some specific time. It specifies how much money is available to market the product so the marketing department know how much to spend.
Market research- is the process of gathering, analyzing and interpreting information about a market
Primary research- is the collection and collation of original data via direct contact with potential or existing customers. (aka field research)
Secondary research- is information that has already been collected and is available for use by others. (aka desk research)
Questionnaire- is a set of questions to be answered as a means of collecting data for market research.
Sample- is the group of people who are selected to respond to a market research exercise, such as a questionnaire
Random sample- is when people are selected at random as a source of information for market research
Quota sample- when people are selected on the basis of certain characteristics as a source of information for market research
Focus group- is a group of people who are representative of the target market
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Types of information
1) Quantitive information which answers questions about the quantity of something
2) Qualitative information which answers questions where an opinion or judgment is necessary

The process of primary research
1. What is the purpose of the market research?
2. Decide on the most suitable method of research
3. Decide on the size of sample needed and who is going to be asked
4. Carry out research
5. Collate the say and analyze the results
6. Produce a report of the findings

Methods of primary research
1. Questionnaires
Advantages
• Detailed qualitative information can be gathered about the product or service
• Customers opinions about the product or service can be obtained
• They can be carried out online, making it easier and cheaper
Disadvantages
•If questions are not well thought out, the answers to them will not be very accurate. It may be misleading for the business if it is thought that the a product is liked by consumers, when in fact the respondents were only saying they thought the product was quite attractive but they would not actually buy it
• Carrying out questionnaires can take a lot of time and money
• Collating and analyzing the results is also time consuming

2. Interviews
Advantages
• The interviewer is able to explain any questions that the interviewee does not understand
• Detailed information about what the interviewee like and dislike abut the product can be gathered

Disadvantages
• Whether consciously or unconsciously, the interviewer could lead the interviewee into answering in a certain way, resulting in in accurate results due to interviewer bias
• Interviews are very time- consuming to carry out and, therefore, they are often an expensive way of gathering information

3. Focus groups
Advantages
• They can provide detailed information about consumer's opinions

Disadvantages
•They can become time consuming, expensive and biased if some people in the panel influenced by the opinion of others

4. Observation
In the form of
-Recording: Meters can be fitted to monitor which tv channels are being watched
-Watching: Includes such activities as counting how many different types of vehicles pass a particular poster
-Audits: Counting the number of products sold to see which have sold well

Advantages
• It is quite an expensive way of gathering data

Disadvantages
• The information only gives basic figures. It does not provide the business with reasons for consumer decisions

Secondary Research (aka-Desk Research)
This is the use of information that has already been collected and is available for use by others.

Internal Sources of Information
Examples
•Sales department sales records, pricing data, consumer records, sales reports
•Opinions of distribution and public relations personnel
•Finance department
•Customer service department

External Sources of Information
Examples
•Newspapers
• Government statistics
• Trade asscocialtions
•Market research agencies
•The internet

Secondary research is often much cheaper way of gathering information as the research has already been done by others.

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These are some definitions and notes on IGCSE Business Studies on chapter 3 Marketing