Market Research

This section explains Market research covering the purpose of market research, Reducing risk and making better business decisions, Methods of market research (primary and secondary research), qualitative and quantitative data, Gathering market research data from social media and the reliability of market research.

The Purpose of Market Research

Market research involves gathering and analysing information about consumers, competitors, and the market to make informed business decisions.

Identifying Customer Needs

Helps businesses understand what customers want, need, and expect in terms of:

• Price.
• Quality.
• Features.
• Convenience.

Identifying Gaps in the Market

Uncovers unmet customer needs or areas where competitors are not serving effectively.

• Enables businesses to introduce unique products or services.
• Reducing Risk and Making Better Business Decisions

Market research provides data that minimises uncertainty.

Helps businesses:

• Develop products that match customer preferences.
• Set appropriate pricing strategies.
• Choose the right location or distribution channels.
• Target marketing efforts effectively.

Methods of Market Research: Primary Research

Primary research involves gathering new and original data directly from sources.

Examples of Primary Research:

Surveys:

Structured questions given to a sample of people.

Can be conducted online, face-to-face, or by phone.

Advantages: Quick to collect quantitative data; cost-effective.

Disadvantages: Responses may lack detail.

Questionnaires:

Similar to surveys but often more detailed.

Can include open-ended or closed questions.

Advantages: Can gather both qualitative and quantitative data.

Disadvantages: Time-consuming to analyse.

Focus Groups:

A small group of people discussing a product, service, or idea.

Advantages: Provides in-depth qualitative insights.

Disadvantages: Expensive and can be influenced by dominant participants.

Observations:

Watching how customers behave in real-life settings (e.g., shops).

Advantages: Reveals actual customer behaviours rather than self-reported opinions.

Disadvantages: Time-consuming and lacks insight into customer motivations.

Methods of Market Research: Secondary Research

Secondary research involves using existing data collected by others.

Examples of Secondary Research:

Internet Research:

Analysing reviews, articles, or industry websites.

Advantages: Easily accessible; low cost.

Disadvantages: May not always be reliable or up to date.

Market Reports:

Data and analysis provided by organisations such as Mintel or Statista or banks.

Advantages: Comprehensive and industry-specific.

Disadvantages: Can be expensive.

Government Reports:

Statistics and information from government sources, such as the Office for National Statistics (ONS).

Advantages: Reliable and free.

Disadvantages: May not cover specific industries or niche markets.

Market Research: Qualitative and Quantitative Data

Qualitative Data:

Non-numerical insights into customer opinions, attitudes, and motivations.

Gathered through interviews, focus groups, or open-ended survey questions.

Advantages: Rich and detailed information.

Disadvantages: Harder to analyse and generalise.

Quantitative Data:

Numerical data that measures customer behaviours and preferences.

Gathered through closed survey questions or sales figures.

Advantages: Easier to analyse and present using graphs or charts.

Disadvantages: Lacks depth and may miss underlying reasons for behaviours.

Gathering Market Research Data from Social Media

Social media platforms provide real-time customer insights.

Methods:

Monitoring customer comments, reviews, and trends.

Using analytics tools to track engagement, preferences, and behaviours.

Advantages:

• Cost-effective and easy to use.
• Access to large audiences and immediate feedback.

Disadvantages:

• Data may not be representative of all customers.
• Potential for bias or unreliable opinions.

Reliability of Market Research Data

The usefulness of market research depends on the reliability and accuracy of the data collected.

Factors Influencing Reliability:

Sample Size:

Larger samples reduce bias and improve accuracy.

Question Design:

Poorly worded or leading questions can distort responses.

Data Source:

Primary data is often more reliable than secondary data but requires careful collection.

Secondary data might be outdated or irrelevant to the business’s specific needs.

Bias:

Data can be skewed by personal opinions or incomplete responses.

Conclusion

Market research is vital for understanding customer needs, identifying opportunities, and minimising risk. By combining primary and secondary methods, and using both qualitative and quantitative data, businesses can make well-informed decisions. However, the reliability of the data must always be critically evaluated to ensure its accuracy and relevance.