Market Research Methods

Market Research Methods

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  By Lisa McGeehanMarket Research Methods
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  Contents What ismarket research? The ‘DECIDE’ model Sources of Information brief Desk/Secondary Market research Field/Primary Market research
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  Define: market research… The process of gathering, recording and analyzing data and info about customers, competitors and the market in which you intend to enter. It includes research on… THE FOUR P’S - what types of consumers buy the products currently - the consumer opinion of the product - ideal consumer price - existing competition, and the potential competition - available/appropriate packaging and promotion - the place in which to sell - whether or not there are any legal restrictions or regulations
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  The DECIDE Model? D' —- Define the marketing problem E' —- Enumerate the controllable and uncontrollable decision factors C' —- Collect relevant information I' —- Identify the best alternative D' —- Develop and implement a marketing plan E' —- Evaluate the decision and the decision process
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  Sources of informationIn order to define the market research methods used by organisations today, we must briefly explore the types of information we intend on gathering: Information can come from 4 different sources: - primary: - secondary: - internal: - external: Collected 1 st hand by the business itself. Should be free from bias, and be able to be traced back to the original source. Used to make informed decisions. Main source of market research. Cheaper than primary; may not be ideally suited tp the purpose required. Less reliable. Published information (newspapers etc). Sourced from within the business; financial data or customer info. Verifiable, reliable. Sourced out-with the business. Govt. statistics, market research by third parties, consumer test reports. Gives insight into the operating environment and direct competitors. Not generally verifiable.
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  Methods of MarketResearch… External source of information; cheaper for the company to obtain. Variety of sources such as: Internet Govt. Statistics Magazines/Journals Reports pre-prepared Internal company reports Desk/secondary market research
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  Advantages & DisadvantagesQuick and relatively easy to obtain. Can give a good insight into positions of competitors without spending a lot of money. Collecting secondary data leaves more time for making in depth data analysis. Secondary data can be used for creating or generating new ideas by providing a base for some core issues. Much of the information published is historic. Competitors have access to the information It is not specifically designed for the required purpose, therefore it is a general response. You cannot usually trace back to original source to check accuracy or ask follow up questions.
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  Field/Primary market researchGathering information 1 st hand. Variety of methods: Surveys : Personal interview, postal survey, telephone survey, purchase surveys. Questionnaires : purpose should be clear; it is a voluntary act of respondent. Test marketing : Selling it to small part of market before full release. Used by majority of food products ‘limited time only’. Potentially unsuccessful products can be removed before too much money is lost. Changes can be made in response to consumer reaction.
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  More… Hall tests: Large no. of consumers asked for opinion on product/service. Mr McGowan’s beer-testing example. movies released to test-audience; scenes may be reshot or endings changed Collection of customer data : loyalty cards, electronic point of sale/barcodes. Internet : growth of e-commerce means more people are completing online questionnaires, personal details are being obtained. Trends in purchases are being tracked.
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  Sampling Random sampling: producing a random list of individuals to survey (telephone directory, electoral register). No chance of bias when selecting the individuals for the survey It is simple to do. Not focused on particular market segment. Assumes all members of that group are the same. Quota sampling : Those chosen are from different segments of the market (social status, age, gender, etc) More expensive than random sampling. More representative than random sampling
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  Advantages & disadvantagesCarrying out their own research allows the marketing organization to address issues specific to their own situation.  Enables the marketer to have a higher level of control over how the information is collected. Information can be kept hidden from competitors and potentially offer an “information advantage” to the company that undertook the primary research. The research that will be conducted might not be appropriate for a long term use. Time consuming Expensive
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