1.3.5 understanding the consumer

1.3.5 understanding the consumer

1. what is market research?

   • an organized effort to gather information about target markets and customers: know about them, starting with who they are. It is an important component of business strategy and a major factor in maintaining competitiveness
   • advantages
     • It helps businesses strengthen their position... It minimises any investment risk. ... It identifies potential threats and opportunities. ... It helps to discover your's and your competitor's strengths and weaknesses. ... It facilitates strategic planning. It helps in spotting emerging trends.
   • disadvantages
     • Marketing research (MR) is a costly affair. It is also lengthy and time-consuming. It has a limited scope. It has a limited practical value. It can't predict consumer behavior. It can't give 100% accurate results.

2. types of market research

   • quantitive
     • a technique to ask questions to the target audience in an organized manner using surveys, polls or questionnaires. Received responses can be analyzed to make well-thought decisions for improving products and services, that will in turn help increase respondent satisfaction levels.
       • customer surveys and questionnaires
   • SAMPLING
     • s a process used in statistical analysis in which a predetermined number of observations are taken from a larger population
     • CLUSTER SAMPLING
       • parts of the population are sampled because of their geographic group or “cluster”. For example, Primary School Children within Nottingham. A random sample is then taken within that cluster.
         • ADVANTAGES -More cost effective for face to face interviews. -Can gather opinions of specific, targeted groups of people.
         • DISADVANTAGES -Can be expensive if the clusters are too large. -Businesses need to have a clear idea of who to target when selecting their cluster.
     • RANDOM SAMPLING
       • members of the population have an equal chance of being selected to take part in the research. Random samples need to start off with a way of numbering or naming the population and then selecting them at random (like in a raffle or lottery).
         • ADVANTAGES Eliminates bias. Wide spread opinions from a variety of people.
         • DISADVANTAGES Can be time consuming to set up. -Can be costly. o Requires more effort than convenience sampling, for example.
     • QUOTA SAMPLING
       • to get a sample that is representative of the overall population. The population is divided (stratified) by important factors such as income, age and location and then a sample (quota) from each section are chosen to take part.
         • ADVANTAGES Quick and easy way of getting a sample. o True reflection of the wider population.
         • DISADVANTAGES Not random, so there’s a risk of bias. o Need to understand the population and have a lot of information before they’re divided.
     • CONVENIENCE
       • when you ask people who are willing to take part and available at the time. An example would be making a questionnaire and just getting your friends in the class to take part. They’re here and willing to participate.
         • ADVANTAGES Cheap. Easy because people are close and willing to participate.
         • DISADVANTAGES People who are near and willing to take part might not be the people you necessarily wish to target.
   • PRIMARY
     • research you conduct yourself It involves going directly to a source
       • Interviews (telephone or face-to-face) Surveys (online or mail) Questionnaires (online or mail) Focus groups Visits to competitors' locations
   • SECONDARY
     • research that has already been compiled, gathered, organized and published by others. It includes reports and studies by government agencies, trade associations or other businesses in your industry.
   • QUALITIVE
     • Qualitative research relies on data obtained by the researcher from first-hand observation, interviews, questionnaires, focus groups, participant-observation, recordings made in natural settings, documents, and artifacts. The data are generally nonnumerical.