4.4 Market research – IB Business Management

Market research
The process of collecting, analyzing and reporting data related to a particular market
Purpose of market research
– To identify consumer needs and wants
– To assist a business in predicting what is likely to happen in the future
– To reduce the risk of product failure
– To measure the effectiveness of a marketing strategy
– To provide current or latest information regarding activity in the market
Primary research
The collection of first-hand information from the market
– surveys
– interviews
– focus groups
– observation
Secondary research
The collection of second-hand information from the market
– academic journals
– media articles
– government publications
– market analyses
Surveys
Questionnaires sent out to a particular target audience (by email, telephone or online)
Advantages- large amount of data, easy to use, can be used to collect information in a wide range of aspects such as opinions
Disadvantages- if constructed poorly, thy can hinder research, answers may not be accurate, can be costly
Interviews
A conversation in which one person asks another questions
Advantages- Detailed information,
high response rate because of the one-on-one attention
Disadvantages- highly time consuming, may be biased
Focus groups
A small group of people brought together to discuss a product or idea
Advantages- subjects are cheap and easy, can be used to measure the reaction of consumers, help identify key product requirements, provide insights on the position of competitors
Disadvantages- opinion of a small number of individuals do not reflect a whole market, some members might not be honest, more costly than surveys
Observation
Carefully watching and trying to understand certain thing in people’s behavior
Advantages- it is a direct method, a large number of individuals can be surveyed, cost-effective
Disadvantages- complete answers cannot be obtained, cannot be used to study attitudes or opinions
Academic journals
Publications of scholarly articles written by experts.
Advantages- they undergo a peer-review before being published, include reports and reviews of current research and topic-specific information, take less time to publish than books
Disadvantages- may not be the best source of general-interest topics, peer-review process can be time consuming
Media articles
Newspapers and magazines
Advantages- cheap, most newspaper articles have been well researched, widely available
Disadvantages- Difficult to communicate events in real-time, information can be biased, can be considered a waste of paper and energy resources
Government publications
Articles produced by the government on a wide variety of topics
Market analyses
Commercial publications or market intelligence reports that gather data about particular markets
Qualitative research
Collecting of data about opinions, attitudes or beliefs
Quantitative research
Collecting of numerical data and data that can be measured
Sample
Small group selected to represent the population or a target market
Sampling methods
– quota sampling
– random sampling
– stratified sampling
– cluster sampling
– snowballing
– convenience sampling
Quota sampling
Segmenting the population into a number of groups that share certain characteristics
Random sampling
Every member of the population has an equal chance of being selected for the sample
Stratified sampling
The target population is made up of many different groups who are subdivided into segments that share similar characteristics
Cluster sampling
When the population is geographically dispersed, a group of people from each region is selected
Snowballing
Surveying the first group or individual, who then suggests another group or individual
Convenience sampling
This is a sampling technique where groups are selected on their easy access and proximity to the researcher