Topic 2 Market Research. Higher Business Management

Transcription

1 Topic 2 Market Research Higher Business Management 1

2 Learning Intentions / Success Criteria Learning Intentions Market research Success Criteria By end of this topic you will be able to explain: the different methods of field research and their costs and benefits the different methods of desk research and their costs and benefits the use of sampling in market research the use of market research information to a business. 2

3 Market Research Market research aims to find out what customers want and what is happening in the marketplace. It involves looking at what already exists (secondary information) and finding out something new (primary information). Market research can find out: The types of customers who are making purchases and their buying habits. How successful marketing and advertising campaigns are, and whether or not they are cost effective. What changes might need to be made to existing products to improve them. What customers would like to see in the future. How customers have reacted to, for example different products, prices and promotions. There are two types of market research: field and desk. 3

4 Field Research This involves carrying out research to gather new information. As this information is gathered first-hand for a specific purpose, it is called primary information. Field research methods include: surveys/questionnaires interviews observations hall tests focus groups. 4

5 / of Field Research Complete field information should have no parts missing. Timely in the respect that the information is up to date. Appropriate field information is fit for the purpose it is needed for. Accurate information should be correct as it can be validated. Not cost effective field information requires trained and paid interviewers or expensive research companies. 5

6 Sampling When field research is being carried out, it is impossible to ask everyone for their opinions on something. Because of this, people have to be selected to take part in a piece of research. Different sampling methods can be used to select people to take part in research: random sampling quota sampling stratified random sampling cluster sampling. 6

7 Random Sampling The sample is picked randomly, e.g. using a telephone directory or list of customers. No bias is shown by the researcher. Saves time in selecting the sample. Sample may not reflect the target market. Can over represent a certain segment, e.g. all males could be chosen at random. Can be expensive as many calls may have to be made if customer lists are not up to date. 7

8 Quota Sampling The researcher chooses from a group of people with certain characteristics. Quick and easy method as group lists are pre-made. The exact sample from each group is not randomised, so researcher bias could be involved. 8

9 Stratified Random Sampling A sample is selected that is representative of the target market, e.g. if 75% of the population for a product is working class, male and aged 20-30, then that s what 75% of the sample should be. Sample represents the target market. No researcher bias as the sample is randomised from the list of those that meet the characteristics required. Takes time to work through population lists and select the exact sample required. The sample chosen could be geographically dispersed, adding to the costs of research. 9

10 Cluster Sampling The population is split into smaller clusters, often geographically, which could represent the population on a small scale. Saves time compared to researching samples spread across wider areas. One of the cheapest methods of sampling. Risk of the sample not being accurate enough to represent the target market. 10

11 Methods of Field Research Once a sample population has been identified, the filed research method must be chosen. Methods of field research: Personal Interview Telephone Survey Postal Survey Online Survey Street Survey. 11

12 Personal Interview This is a face-to-face interview. A number of questions will be asked by the interviewer. Clarification can be gained on questions not understood. Body language and facial expression can be monitored. Information is obtained instantly. Time-consuming and expensive to carry out. Not many people may be able to be interviewed in this way compared to other survey methods. Researcher requires training to be successful (e.g. questioning techniques). 12

13 Telephone Survey People are contacted by telephone and asked to answer questions. People spread across large geographical areas can be accessed. Less expensive than a personal interview. Clarification can be obtained. Information is obtained instantly. People might not like taking part in a telephone survey. Large and/or timeconsuming surveys are unlikely to be suitable for this method. 13

14 Postal Survey A survey is sent through the post, is completed and then sent back. People spread across large geographical areas can be accessed. Surveys can be completed at a time that people choose and is more convenient to them. Relies on people opening the letter containing the questionnaire in the first place, completing it and sending it back. Information is not obtained instantly. Clarification cannot be gained; the survey has to be designed carefully. 14

15 Online Survey A website is used to ask questions and people simply access the website to answer them. Online software can often be free of charge. No postal or telephone costs. People spread across large geographical areas and countries can be accessed. Online software can often collect and analyse the results. Online software that is free might limit the number of questions that can be asked. People require access to the internet. Clarification cannot be gained; the survey has to be designed carefully. 15

16 Street Survey Asking people in the street to complete a survey. Specific individuals can be chosen (e.g. based on their age or gender). Clarification can be gained. Expensive to carry out as individuals need to be employed to carry out the survey. 16

17 Desk Research This involves looking at existing information (secondary information) from either within the organisation (internal information) or outwith the organisation (external information). Desk research might involve looking at: websites newspaper articles and magazines government reports textbooks. 17

18 / of Desk Research Timely desk information is quick to gather. Cost effective desk information does not require trained and paid interviewers or research companies. Available desk information already exits so is easy to look up. Not objective desk information is collected and presented by someone else, so could be biased. Not appropriate desk information is not fit for the exact purpose and may have to be shoehorned to fit the businesses needs. Not concise the researcher may have to read through a lot of information to get what is needed. 18

19 Types of Desk Research Desk research involves looking at different types of secondary (existing) information. Some of this information might be available electronically through, for example, the internet. There are different types of information that might be analysed: Written Oral Pictorial Graphical Numerical. 19

20 Written Information that is presented as text, e.g. reports, text messages, s, written text on web pages.. Can be kept for future reference. Facts can be passed on more accurately compared to oral information. May be unable to obtain clarification. Requires a degree of literacy skills. 20

21 Oral Information that is spoken and heard by someone else, e.g. in a meeting or on the telephone or from a TV programme.. Instant response is given. Questions can be asked immediately. Body language can be monitored. Points might be misinterpreted. Requires careful listening skills. 21

22 Pictorial Information presented through photographs or pictures in reports, newspapers or websites. Information is presented attractively. Significant points can be highlighted and/or emphasised. Complex information cannot be communicated. Factual information cannot be communicated as easily as in written information. 22

23 Graphical Information presented through a graph or chart. Comparisons can be made easily. Complex information can be presented clearly. Requires numeracy skills to create graphs. The user needs to be able to interpret graphical information. 23

24 Numerical Information presented through numbers, e.g. sales figures on websites of companies. Financial information can be analysed. Calculations can be carried out. Requires numeracy skills to handle and interpret numerical information. 24

25 Sources of Information Primary Secondary Internal External Source is known and is therefore more reliable than secondary information. Information is gathered for a specific purpose and is therefore relevant. Easier to obtain than primary information. Usually cheaper to obtain than primary information. Unique to the organisation and is therefore relevant. The source is known and therefore more reliable. Easy to obtain, saving the organisation time. More information can be accessed through, for example, the internet compared to internal information. Time-consuming to collect, which might delay decision-making. Expensive to collect which will reduce profitability. It was collected for another purpose so might not be as useful. The information might be biased, which would lead to wrong decisions being made. Information might not be up-to-date or complete, which means a wrong decision could be made. Computer systems might be required to store internal information, which would be expensive. Source might not be known and could be unreliable. The information might not be up-to-date, meaning it might not be relevant anymore. 25