1.3.5

1.3.5

1. Market research

   • Primary research= research carried out directly e.g. surveys
     • +It is more specific than secondary research, it finds new/ relevelant/ up to date info about the target market and allows the business to concentrate its resources on the target market,
     • -It is quite expensive and time-consuming, may not be carried out by a professional and depends on the mood of the interviewer
   • Secondary research= research carried out by a third party e.g. the government and is information that already exists
     • +It is cheaper/quicker than primary research, data about the mass market can be collected and allows businesses to examine trends
     • -It is general and may not be exactly what is required, it may not be reliable, it is available to competitors and often out of date
   • Qualitative data= a description such as a opinion=open questions
   • Quantitative data= numerical and involves statistics=closed questions
   • Market research=the collection of data in order to learn about the needs and wants of a consumer

2. Sampling methods

   • Cluster sampling=parts of the population are sampled because of their geographic group e.g. primary school children within Nottingham
     • +more cost effective for face to face interviews, can gather opinions of specific targeted groups of people
     • -can be expensive if the clusters are too large, businesses need a clear idea of who they want to target in order to choose their cluster
   • Random sampling=members of the population all have an equal chance of being selected to take part in the research and are chosen at random
     • +eliminates bias, wide spread opinions from a variety of people
     • -can be time consuming to set up, can be costly, requires more effort than convenience sampling,
   • Quota sampling=aims to get a sample that is representative of the overall population, the population is divided (stratified) by important factors such as age, income and gender and then a sample (quota) from each section is chosen to take part
     • +quick and easy to get a sample, true reflection of the wider population
     • -not random so there is a risk of bias, you need to understand the population and have a lot of information before you divide it
   • Convenience sampling=you ask people who willing and able to take part at that time e.g. doing a questionnaire and asking your class mates to do it
     • +cheap and easy
     • -people who near and willing to take part may not neccessarily be the target market you want

3. Limitations of Market research, sample size and bias

   • Structure=data collected may not be specific enough to make good marketing decisions
   • Size=a larger sample size lowers the margin of error making the research more representative
   • Representation=data collected may not take into account regional differences
   • Bias=when companies collect data they need to be as fair as possible=a sample may be biased
   • Strong confidence level=if the researcher is confident that the research is accurate a smaller sample will suffice
   • Strong confidence level=if the researcher is confident that the research is accurate a smaller sample will suffice

4. Market segmentation

   • Market research=when a market is divided into groups of similar consumers e.g characterisitcs
   • Geography:differnet regions have different cultures, languages and cultures
   • Demographic segmentation:age, gender or income
   • +allows firms to gain better opportunities to grow, to promote their goods and services more effectively and to meet consumers needs better, know their consumers better, encourages businesses to specialise
   • -it is hard to segment the market due to limited data, costly and time consuming, could lead to the manufacture of too many different products and could narrow the focus of the business
   • Behavioural:how consumer behave and react to certain products
   • Pyschological:analysing customers based on their lifestyles, values, personalities and attitudes