Market Research

Market research gathers information about consumers, competitors and distributors within a firm's target market. It is a way of identifying consumer's buying habits and attitudes to current and future products.

• Market research is critical to every business in order to understand the market.
• Market share is also important to consider when investigating the market as they can begin to analyse the strengths and weaknesses of market leaders - this can be found through secondary data.

Internet: Google can provide anything from quantitative statistical data to qualitative articles surrounding a particular topic.

Government-produced data: ONS are government-funded and Labour Market Trends.

Newpaper/Magazine Articles: Which? Magazine to analyse competition.

Other Firm's Market Reports - MINTEL

Pros -

• Often obtained without cost.
• Good overview of a market.
• Usually based on actual sales figures, or research on large samples.

Cons -

• Data may not be updated regularly (therefore out of date - especially bad in constantly changing markets sych as tech).
• Not tailored to your own needs.

• Expensive to buy reports on many different market places.

• Retailer research - the people closet to a market are those who serve customers directly - the retailer. They are likely to know up and coming brands, degrees of brand loyalty and packaging.
• Observation - this could be used to assess anything from footfall to customer buying habits.
• Questionnaire
• Survey
• Interviews
• Focus Panels

Pros

• can aim questions directly related to your research objectives.
• receive the latest information on the market place.
• can asses the psychology of a customer.

Cons

• expensive.
• risk of questionnaire and interview bias (HAWTHORNE EFFECT).
• research findings may only be usable if comparable 'backdata' exists.

In-depth research into the motivations behind the attitudes and buying habits of consumers - it does not produce statistical data as they have to be interpreted.

Main examples of qualitative research include focus groups.

Focus groups - free ranging discussions led by a psychologist among groups of 6+.

Advantages of focus groups -

• may reveal a problem or oppotunity the company had not anticipated.
• reveals consumer psychology such as the importance of image and peer pressure.

This asks pre-set questions to a large enough sample of people to produce statisticall valid data.

Questionnaires and surveys are the most common methods.

3 key aspects to quantitative research:

• sampling - ensuring that the research results are typical for the whole popualtion (though only a sample of the population has been questionned).
• writing a questionnaire - unbiased and mmeets research objectives.
• Validity - assessing this is important.

Market Mapping is carried out in 2 stages:

• Identify key features that characterise consumers within a market - e.g. womens clothing = young/old and high fashion/conservative.
• Having identified the key characterists place brands on the grid (competitors) to identify a gap.

Standard Deviation =

sample findings tend to form a bell-shaped curve when shown on a graph. Within this curve, the standard deviation of this curve reflects how wide or narrow is the likely variation from the mean average of the findings.