Conducting Start-up Market Research

• MARKETING- the anticipation and satisfying of customer wants in a way that delights the customer
• MARKET RESEARCH- the systematic collection, collation and evaluation of data intended to assist the marketing process
• QUALITATIVE RESEARCH- the collection of data that looks at the motives behind consumer buying behaviour
• QUANTITATIVE RESEARCH- the collection of information about the market based upon numbers
• TEST MARKET- the use of a specific small geographical area chosen to represent the wider market in which to launch a new product/service to assess the reaction of customers before larger-scale launch
• SAMPLE- a group of respondents whose views are chosen to try to represent those of the wider target market
• QUOTA SAMPLE- a sampling method in which the numbers and the characteristics of respondents are specifically chosen to reflect the characteristics of the target market
• STRATIFIED SAMPLE- respondents are chosen according to particular features eg. age

• FOCUS GROUPS- where groups of consumers are gathered to talk about their views of a product/market and these views are used to inform the marketing of a firm
• 95% CONFIDENCE- where the results of the sample are statistically significant and are likely to be correct 19 times out of 20.

Data is often easier to find as it already exists..

Businesses tend to use this type of data first to provide an overview of the market and they then use primary research to gain more specific information about their product/service...

sources include:

-government publications

-newspaper articles

-company reports

-the internet

-market research organisation data

BENEFITS

• The information is quick and easy to obtain
• It is cheaper to acquire than primary research
• Provides a useful overview of the entire market

PROBLEMS

• Data is often out-dated and this can be misleading
• It is not specific to the needs of your business
• Data available to everyone including your competitors

• Asks 'how many?' and 'how often?' type of questions

• The sample size needs to be large to ensure reliability which is costly!

• Numerical data is easier to use for comparison with rival firms

• It fails to explain the motives behind consumer buying behavior

• Provides insighs into consumer behaviour, allowing you to modify your marketing

• It is expensive to acquire and usually only done on a small scale

• Asks  'why?' and 'how?' type questions

• The open nature of the answers makes it very hard to use as a basis for comparison

• Requires a database of the population which is costly!

• Opportunities for bias in the results

• Includes people who are not part of your target market...

• The easiest and cheapest sampling method for small businesses

• More accurate match to your target market as it removes segments not interested in your products

• Subject to bias as both location and the respondents are chosen by the interviewer

• Extra time needed in planning the sample and this adds to costs.. May be too expensive for small firms

• CUSTOMER BASE- random sampling is the best one for small firms to allow them to identify their customers
• TYPE OF MARKET- if you are only aiming at one segment then use quota/stratified methods
• LIMITED BUDGETS- remember small firms have very limited funds available which tends to favour using random samples
• DEGREE OF RISK- in fast moving and rapidly changing markets random samples are best!