Primary and Secondary Market Research Data 1.1.2
Sampling - In market research, sampling means getting opinions from a number of people, chosen from a specific group, in order to find out about the whole group.
It would be expensive and time-consuming to collect data from the whole population of a market. Therefore, market researchers make extensive use of sampling from which, through careful design and analysis, marketers can draw information about their chosen market.
Primary research - Data gathered first hanf that is specifically designed and obtained for a specific business. These can come in the form of focus groups, observation, face-to-face surveys and online surveys
Secondary research -involves using data collected by someone else that has not been designed specifically for the business requiring the information. This can come in the form of published market research reports, Google, ONS (official statistics), Media reports, Competitor materials.
Sample size - The amount of data collected by the business from customers or potential customers.
Bias - Where the findings do not give a true reflection of the views of the target audience on the product or service
Demographic trends - Statistics showing how things are changing within the population, such as age, marital status, place of birth and household income.
Primary and secondary market research data used to identify and anticipate customer needs and wants, quantify likely demand and gain insight into consumer behaviour
Primary and secondary market research are the two ways in which a business can undertake market research. These are essential for any business aiming to be market orientated. They allow the business to gather data on customer desires in relation to a product or service and can help in forecasting potential customer demand.
Primary Market Research
OBSERVATION is where the business watches customers to see how they behave when purchasing (or choosing not to purchase) specific products or services. This method is time consuming and costly but can reveal customer views and feelings about a product that other methods cannot.
ONLINE SURVEY are an ICT method of asking customers questions about a product or service through the use of a range of websites, such as social media sites or a specific question and answer website. Online surveys are widely use by businesses as a way of capturing the views if exisiting and potential customers and have the added benefit of automatically feeding the results into a database that can collect all the answers. However, they have low response rates from potential customers, so can give a distorted picture of consumer opinion generally.
FACE-TO-FACE SURVEYS are personal interviews conducted face to face to obtain customer views on products or services. They are a costly but productive way to get detailed insights from an individual. This method is particularly useful for asking more emotional response-style questions about the product or service.
FOCUS GROUPS are groups of potential customers brought together to discuss their feelings about a product or market. Focus groups are a good way of getting detailed qualititative information about customer tastes and preferences, but again can be expensive compared with other types of methods such as online surveys.
Advantages of Primary Research
ONLINE SURVEY are an ICT method of asking customers questions about a product or service through the use of a range of websites, such as social media sites or a specific question and answer website. Online surveys are widely use by businesses as a way of capturing the views if exisiting and potential customers and have the added benefit of automatically feeding the results into a database that can collect all the answers. However, they have low response rates from potential customers, so can give a distorted picture of consumer opinion generally.
FACE-TO-FACE SURVEYS are personal interviews conducted face to face to obtain customer views on products or services. They are a costly but productive way to get detailed insights from an individual. This method is particularly useful for asking more emotional response-style questions about the product or service.
FOCUS GROUPS are groups of potential customers brought together to discuss their feelings about a product or market. Focus groups are a good way of getting detailed qualititative information about customer tastes and preferences, but again can be expensive compared with other types of methods such as online surveys.
Advantages of Primary Research
- Gathers up-to-date customer views about the product
- Questions can be tailored to meet the individual needs of the business
Disadvantages of Primary Research
- Can be difficult to collect the data
- Can be time-consuming
- Can be expensive
- May provide misleading results if the sample size is not large enough or not chosen with care
- Questions may be worded so as to bias the answers in a particular direction
Secondary Market Research
DEMOGRAPHIC TRENDS - Government statistics are available to all businesses and can contain data such as demographic trends, for example the rate of rise in the number of under-fives expected over the next five years. These are free to obtain and usually free from businesses bias. The disadvantages are that the data can be a year or two out of date and all businesses have access to the same information.
PUBLISHED MARKET RESEARCH REPORTS - Mintel and other commercial organisations publish marker research reports on hundreds of products and services. The advantage of these reports is that they are specifically about a certain market, showing its current businesses and potential areas for new businesses to target their product or services at. The disadvantages are that the reports are available to any business, they are still not completely focused on specific questions to which the business might like to know the answers, and they are expensive to buy.
COMPETITOR'S DATA - for example publicly available sales and profit figures, can be used to help research how the competitor is performing in the market. The advantages of this research are that it is very cheap to obtain and shows rivals' performance in the market. The disadvantages are that every competitor can access it and the information available is very basic, so it is usually of little real value.
☆QUALITATIVE VS QUANTITATIVE☆
Qualitative = Research based on views and opinions.
Based on opinions, attitudes, beliefs and intentions. Answers research questions such as "why?", "would?", "How?", etc. Aims to understand why customers behave in a certain way or how they may respond to a new product or service. Focus groups and interviews are common methods used to collect qualitative data.
Benefits
☆ Essential for important new product development and launches.
☆ Focused on understanding customer needs, wants, expectations = very useful insights for a business.
☆ Can highlight issues that news addressing - e.g. why customers don't buy
☆ Effective way of testing elements of the marketing mix e.g. new branding, promotional campaigns.
Drawbacks
⊙ Expensive to collect and analyse it requires specialist research skills
⊙ Based around opinions this is always a risk that the sample is not representative
Quantitative = Research based on numerical data
Concerned with and based on data. Addresses research questions such as "how many?" "How often?" "Who?" etc. Based on larger samples and is, therefore, more statistically valid. Main methods of obtaining quantitative data are the various forms of survey i.e. telephone, postal, face-to-face and online.
Benefits
☆ Data relatively easy to analyse
☆ Numerical data provides insights into relevant trends
☆ Can be compared with data from other sources (e.g. competitors, history)
Drawbacks
⊙ Focuses on data rather than explaining why things happen
⊙ Doesn't explain the reasons behind numerical trends
⊙ May lack reliability is sample size and method is not valid
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