3.2. Market research
The role and methods of market research
Market oriented business: Products that are developed based on consumer
demand as identified by market research.
A market-oriented approach will attempt to:
● Create products based on what consumers want
● Develop brand loyalty by ensuring customer needs and wants are satisfied
● Securing competitive advantage over rivals by targeting and meeting the
needs of a specific group of customers
● Identify the changes in the market and changes in the needs of customers,
allowing the business to be the first to react.
Market research is the process of collecting, recording, and analysing data about
customers, competitors, and market for a product.
Collecting Customers
Recording Competitors
Analysing Market
How is market research conducted?
Two types of data:
● Quantitative data.
● Qualitative data.
Primary research
Involves collecting data first-hand. Data collected by organisations for the first time
and for its own specific needs.
Methods of primary research:
● Questionnaires
Can be done face-to-face, through telephone, post, or by the internet.
Advantages:
- Detailed info can be collected
- Customer’s opinions about the product can be obtained
- Online surveys will be cheaper and easier to analyse
Disadvantages:
- If questions are not clear/misleading, unreliable answers will be given
- Time consuming and expensive to carry out research.
, ● Focus groups
Groups of people who try out the product and give opinions on it so that firms
can improve their product(s).
Advantages:
- Can provide detailed information about the consumer’s opinions
Disadvantages:
- Time-consuming
- Expensive
- Opinions could be influenced by others in the group
● Test market
Firms launch product(s) to a small part of the market to see how those
consumers react to it.
● Observation
Watching consumers as they shop to be able to draw conclusions about
shoppers and their behaviours.
Advantage:
- No cost
Disadvantage:
- Only gives basic figures. Does not tell the firm why the consumer buys
them.
● Consumer surveys:
- Interviews
Can get detailed answers because face-to-face interviewing and
questioning
- Postal surveys
Using letters/emails
- Online surveys
Online websites, etc.
Advantages of primary research:
● Up to date
● Data is collected for a specific purpose, directly relevant to business
● Not available to other businesses, which provide a competitive advantage
Disadvantages of primary research:
● Expensive
● Time consuming
● Risk of data being inaccurate or can be biased
The role and methods of market research
Market oriented business: Products that are developed based on consumer
demand as identified by market research.
A market-oriented approach will attempt to:
● Create products based on what consumers want
● Develop brand loyalty by ensuring customer needs and wants are satisfied
● Securing competitive advantage over rivals by targeting and meeting the
needs of a specific group of customers
● Identify the changes in the market and changes in the needs of customers,
allowing the business to be the first to react.
Market research is the process of collecting, recording, and analysing data about
customers, competitors, and market for a product.
Collecting Customers
Recording Competitors
Analysing Market
How is market research conducted?
Two types of data:
● Quantitative data.
● Qualitative data.
Primary research
Involves collecting data first-hand. Data collected by organisations for the first time
and for its own specific needs.
Methods of primary research:
● Questionnaires
Can be done face-to-face, through telephone, post, or by the internet.
Advantages:
- Detailed info can be collected
- Customer’s opinions about the product can be obtained
- Online surveys will be cheaper and easier to analyse
Disadvantages:
- If questions are not clear/misleading, unreliable answers will be given
- Time consuming and expensive to carry out research.
, ● Focus groups
Groups of people who try out the product and give opinions on it so that firms
can improve their product(s).
Advantages:
- Can provide detailed information about the consumer’s opinions
Disadvantages:
- Time-consuming
- Expensive
- Opinions could be influenced by others in the group
● Test market
Firms launch product(s) to a small part of the market to see how those
consumers react to it.
● Observation
Watching consumers as they shop to be able to draw conclusions about
shoppers and their behaviours.
Advantage:
- No cost
Disadvantage:
- Only gives basic figures. Does not tell the firm why the consumer buys
them.
● Consumer surveys:
- Interviews
Can get detailed answers because face-to-face interviewing and
questioning
- Postal surveys
Using letters/emails
- Online surveys
Online websites, etc.
Advantages of primary research:
● Up to date
● Data is collected for a specific purpose, directly relevant to business
● Not available to other businesses, which provide a competitive advantage
Disadvantages of primary research:
● Expensive
● Time consuming
● Risk of data being inaccurate or can be biased
