3.3.2 Flashcards
(44 cards)
what is market research
involves gathering and analysing qualitative and quantitative market data. Market research is the key indicator of customer needs, which drives decision making across all business functions, not just marketing.
market research process
define problem /question
develop market research plan
collect data
analyse data
interpret and report findings
advantages of primary market research
- specific to the needs of the business
- more up to date and reliable - gives more opportunity for two-way communication and follow up questions
- often better if you want to collect qualitative data
- sampling provides an insight into the market, but saves money as the whole population is not needed; a sample must be representative, unbiased and large enough to represent the whole market
disadvantages of primary market research
- can be more time-consuming and therefore more costly
- difficult to conduct a large sample size.
examples of primary market research
questionnaires, consumer panels, interviews, focus groups and customer observations
what is primary market research
research collected first hand
what is secondary market research
research that already exists conducted by another organisation
advantages of secondary market research
- easily accessible and a good starting point
- fast and less time-consuming
- often better if you want to collect quantitative data
disadvantages of secondary market research
- some data can be free but detailed reports can be expensive to purchase
- not always up to date or specifically tailored to the business’s needs
examples of secondary market research
market research reports, competitors, websites, government statistics and newspaper articles.
what is market mapping
a technique used to understand how products/businesses are viewed relative to competitors based on two relevant characteristics.
why is market mapping useful
- helps businesses decide whether to set up in a market
- a useful process for comparing similarities and differences between businesses - market positioning
- helps a business gain a better understanding of its competition
- useful as a market research tool to gain an understanding of customer perceptions.
a limitation of market mapping
it only considers two main variables - markets and customer perceptions are often very complex.
what is correlation
Correlation helps businesses understand the relationship between two factors. If a business can understand the key factors determining demand for its products, then it can manipulate them to achieve greater sales.
positive correlation
+0.9
customer satisfaction
negative correlation
-0.8
price
no correlation
0
value between -1 and +1
what is sampling
Sampling involves selecting a representative group of people from the target population.
advantages of sampling
It is quicker and easier than trying to collect research from everyone
- this is often impossible
The bigger the sample size, the more representative it will be.
The sample size and the method of conducting the research will determine
accuracy and reliability
Anything less than the whole population cannot be
100% accurate
what is a confidence interval
an indication of how accurate the research findings are, for example 80% = 80% confidence that the results are accurate.
what is a confidence interval
the possible range of outcomes for a given confidence. As the interval narrows the confidence level will fall.
what does extrapolation mean
Extrapolation means predicting future trends, for example sales trends based on past results.
