5.3 - The purpose and methods of market research

1. market share - sales of each producer as a percentage of total sales in the market
   1. competition - number as the size and number of competitors
      1. target market - as business is likely to focus on part of the market with similar needs and wants known as market segment e.g. children between ages 10-13 for lego

1. involves the use of numbers e.g. the size of the market, the growth of the market or number of customers a business has

1. involves opinions and views but not statically reliable information e.g. why people like a certain washing up liquid

Annotations:

• can be tailored to meet businesses needs and is up to date but it can be more expensive to gather and results can be misleading 
• Advantages:  telephone surveys - can call when convenient to business  door-to-door - can see reactions and people may be more likely to tell the truth  focus groups - in-depth responses  internet research - quick, cheap
• disadvantages: telephone survey - cannot see reactions e.g. body language. people may not answer phones/be reluctant to give answers  door-to-door - time consuming  focus group- small groups may not reflect all target customers  internet research - may not find views of target customers 

1. questionaries and surveys

   Annotations:

   • where people are interviewed that may the product and asked a range of questions now done increasingly through online questionnaires 
   • types of surveys:  telephone - calling customer to obtain views, its relatively cheap but difficult to get people to answer questionnaires - often completed online and they need to be asked carefully to avoid bias of incorrect responses  customer/supplier feedback - asking what people think and asking suppliers on issues like speed of response and how it compares to other busineses 
   1. observations

      Annotations:

      • e.g. watching shoppers buying habits in a supermarket 
      1. consumer trials

         Annotations:

         • experimenting such as offering customers a trail of a new product and gathering feedback
         1. hall tests
            1. focus groups

               Annotations:

               • small groups of people selected to give their views on a particular business e.g. brand image or product compared to competitors 

Annotations:

• Advantages:  can be gathered quickly and cheaply as data is already gathered e.g. by specialist market research companies like Mintel also provide information on large parts of the population which would be unrealistic for a business to gather e.g. economic growth of country 
• disadvantages:  include existing data that may not be what the business wants e.g. spending habits for the whole country rather than in one place  the existing data may be out of date e.g. last government census of population was 2011

1. articles
   1. books
      1. newspapers
         1. internet
            1. CD/DVD

1. volume of sales = number of units sold x price per unit
   1. 2,000 units are sold at £5 means volume of sales = 2,000 x £5 = £10,000

1. original market size £10,000 and the current market zee is £12,000. change in market = £2,000 market growth = £2,000/£10,000 X 100 = 20%

1. if product sales are £5,000 and total market sales are £100,000. market share = £10,000/£100,000 X 100 = 10%

1. for example , if a product has 10% of market and sales are £10,000
   1. calculate 1% 10% = £10,000 10%/10 = 1 £10,000/10 = £1,000 so 1% = £1,000
      1. calculate the size of the whole market by multiplying both sides £1,000 x 100 = £100,000