Market Research is the collection, collation and analysis of data.
It can be done for descriptive, predictive, explanatory or exploratory reasons
A business may research: the market, competitors, products, promotion or pricing
Internal secondary research: existing market research, sales figures, feedback from sales team, accounts, stock movements
External secondary research: Competitors information, government publications, EU data, trade, commerical and general (newspaper) publications
Primary research includes: questionnaires, interviews, surveys (postal or telephone), observation, focus groups, consumer panels and test marketing
Pros and Cons of Market Research
Why do it?
- Minimise risk
- Find out more about customer or markets
- Find gaps in the market
- Gain customers opinions on a product
- Can be inaccurate / unreliable
- Information is only as good as the method used
- Cannot eliminate risk
- Can be expensive and time consuming
A market is anywhere buyers and sellers can meet to exchange goods and services.
Market Share: The proportion of the total market that an business has achieved
Market segmentation involves subdividing markets into groups of customers with different needs, so that they can deliver goods or services to meet their needs.
A market can be segmented by: geographic, demographic, psychographic, or behavioural factors
Advantages: match customer needs, increase profits, target marketing, gain market share of segments
Sales of Goods Act - goods must be: of satisfactory quality, as described, fit for purpose
Businesses must provide a replacement or money back if these conditions are not met.
Trade Descriptions Act - 'Any description of a good or service must not be false or misleading' (verbal descriptions, advertisements)
Weights and Measures Act - It is an offense to incorrectly indicate the amount of a product that is for sale
Working Time Directive - Employees must not be forced to work more than 48 hours per week
Employment Tribunal - It determines disputes between employers and employees. It deals with unfair dismissal, deiscrimination etc.
Advertising Standards Authority - Adverts should be: legal, honest, decent, responsible. (They can refer businesses to the Office of Fair Trading)
Office of Fair Trading - It aims to make markets work well for consumers by enforcing consumer law and consumer protection (It can investigate, as well as impose fines and imprisonment)
Data Protection Act - It protects data held about employees. Must comply with 8 principles
Competition Commission - Conducts enquires into markets, mergers and regulates major industries
Trading Standards - Aims to eliminate rogue traders and unfair practices from markets
Random - indiscriminate, everyone has an equal chance of being selected
Systematic - Uses a mahtematic formulae to calculate who will be selected (e.g. every 1000th person)
Stratified - Divided into segments thought to be representative of population
Quota - Population segmented by characteritics (less expensive)
Cluster - Population split by geographical location (random sample taken from cluster, quick)
Multi-stage - taking a random sample from another sample (Bury St Edmunds, Suffolk)
Guerrilla Marketing - Make a business or product known on a small budget using non-traditional methods
Advantages - Low cost, simple, targeted, can be changed easily
Methods include: Product giveaways, demonstrations, chalkings/ tree postings, stickers and the internet (pop-ups, banners, viral adverts)
Market Led Marketing - A business chooses to focus purely on the customers needs
The customer is priority, good customer service, good relationships, meets expectations
Asset Led Marketing - A business chooses to focus on its core competencies when developing a new product or service. These may be human, physical (distribution) or intangible (brand/reputation)