Conducting start-up market research

Key words

Marketing: the anticipation and satisfying of customers’ wants in a way

that delights consumers and also meets the needs of the organisation

Market research: the systematic and objective collection, analysis and evaluation of information that is intended to assist the marketing

process

Purposes of market research

• Descriptive reasonso Achieving objectiveso Identifying trendso Comparisons

• Explanatory reasonso Helps an organisation to investigate why certain

things occur e.g. does the weather affect sales?

Purposes of market research

• Predictive reasonso To predict trends and find links between sets of

data e.g. calculating the extent to which advertising influences sales volume

• Exploratory reasonso Occasions such as when a new product is

launched, there will be no existing information, a business may conduct research into probably consumer reaction

Types of market research- how it is collected

Primary market research:The collection of information first-hand for a specific purpose

Secondary research:The use of information that has already been collected for a different purpose

Types of market research- the content of the data

Qualitative:The collection of information about the market based on subjective factors such as opinions and reasons

Quantitative:The collection of information about the market based on numbers

Primary market

research

Experiment

Observation

Focus groupsSurveys

Test marketing

Task

From your textbook, create summary notes on the 5 types of primary research. Pages 43-47Include the following:1. An explanation2. Benefits3. Drawbacks

Secondary research

Government publications

Newspapers

Magazines

Company recordsCompetitors

Market research

organisations

Loyalty cards

Internet

Content of data- Qualitative MRBenefits Drawbacks

The business can gain a better insight into what it needs to do to appeal to its consumers. It also can be used to appeal to new potential customers

This research can highlight issues that the business was not aware of and as a result, take action

Can give a detailed insight into customers’ thinking processes when they buy products. It can enable business to modify their marketing strategies.

It is expensive to gather, as it usually requires skilled personnel to interpret it, as a result it is conducted on a small scale. This can lead to bias or unrepresentative opinions.

It is difficult to tabulate the data and compare them with other data as the opinions are often unstructured.

Content of data- Quantitative MR

Benefits Drawbacks

It summarises data in a concise and meaningful way

The use of numerical data makes it easier to compare results with those of other organisations, such as competitors or divisions of the same organisation

Can be used to identify trend and project future trends

It only shows ‘what’ rather than ‘why’

It can lack reliability and validity if the sample is too small or biased.

Sampling

Sample: a group of respondents or factors whose views or behaviour should be

representative of the target market as a whole

Sample size

• The sample size measures the number of people or items in a sample

• A firm needs to balance the need for accuracy against the cost of the survey

• Large samples increase reliability but cost more, small samples do the opposite

• The degree to which the statistics are a reliable predictor of actual events is known as the ‘confidence level’

Types of sampling

Random samplingA group of respondents in which each member of the

target population has an equal chance of being

selected

Quota samplingA group of respondents

comprising several different segments, each sharing a common features e.g. age

or gender. Interviewees are selected non-randomly by

the interviewer

Stratified sampleA group of respondents

selected according to particular features e.g. age or gender. However unlike quota sampling where the final selecting is left to the

interviewer, in stratified the sub-groups and their sizes

are chosen specifically

Factors influencing the choice of sampling methods

• Cost and availability of finance

• Time

• The importance of market segments

• Whether the business is targeting a specific group of customers

• The firm’s understanding of its customer base.