<3.2 MARKET RESEARCH>

• A business needs to FIND OUT HOW MANY PEOPLE WOULD WANT TO BUY THE PRODUCT THEY ARE PLANNING TO OFFER FOR SALE. If there is no demand or not a very big market for the product, then knowing this in advance will help the company AVOID WASTING A LOT OF MONEY. It could even cause the business to go bankrupt.

• Therefore, it is very important that market research is carried out accurately. By carrying our market research, a business can IDENTIFY CUSTOMER NEEDS in a changing and competitive international environment. ‘This is essential if a business is to REMAIN COMPETITIVE IN THE FUTURE.

Market research is used to try to find out the answers to these questions.

Q. What feature of my product do people like or dislike?

Q. Would they be willing to buy more product?

Q. What price would they be prepared to pay?

Q. Where would they be most likely to buy the product?

Q. What type of customer would buy my product?

Q. What type of promotion would be effective with these types of customers?

Q. What is the competition like?

WATCH THE TWO VIDEOS ABOVE AND DECIDE WHETHER THE PRODUCTS ARE PRODUCT OR MARKET ORIENTATED, AND JUSTIFY YOUR ANSWER.

CHOOSE A TOPIC RELATED TO 'WHAT'S YOUR FAVOURITES' AND CREATE A QUESTIONNAIRE CONTAINING 5 'QUANTITATIVE' QUESTIONS AND 5 'QUALITATIVE' QUESTIONS.

PRIMARY RESEARCH, or field research, is the collection and collation of original data. It involves direct contact with potential or existing customers. This research will usually have been planned and carried out by the people who want to use the data; it is first-hand, It can be an expensive way to gather information and will usually be for a specific purpose, for example, to test the market to see if a new product would be likely to succeed.

When interviews are used, the interviewer (the person asking the questions) will have ready-prepared questions for the interviewee (The person answering, the questions),

ADVANTAGES:

• ‘The interviewer is ABLE TO EXPLAIN ANY QUESTIONS that the interviewee does not understand

• Can gather VERY DETAILED INFORMATION about what the interviewees like and dislike about the product can be gathered. 

• Able to GUAGE BODY-LANGUAGE, to attain more accurate answers

DISADVANTAGES

• The interviewer could lead the interviewee into answering in a certain way, resulting in inaccurate results due to interviewer BIAS.

• Interviews are very TIME-CONSUMING to carry out and, therefore, they are often an EXPENSIVE way of gathering information.

This is where groups of people (focus groups) agree to provide information about a specific product or general spending patterns over a period of time. This helps with development and sales. Groups may also test new products and then discuss what they think of them, explaining, what they like and what they dislike about them.

ADVANTAGES:

• They can PROVIDE VERY DETAILED INFORMATION about consumers’ opinions

DISADVANTAGES:

• ‘They can be TIME-CONSUMING, EXPENSIVE, and BIASED if some people in the panel are influenced by the opinions of others.

Observation can take the form of:

RECORDINGS - for example, TRACKERS can be fitted to monitor websites students visit.

WATCHING — Such as counting how many times students ask to visit the toilet each class.

AUDITS — for example, the counting of stock in the canteen to see which products have sold well.

ADVANTAGES:

It is quite an INEXPENSIVE way of gathering data

DISADVANTAGES:

The information only gives BASIC figures. It does not provide the business with reasons for consumer decisions.

When deciding who to ask to fill in a questionnaire or who to interview, a sample would have to be selected as it would be too expensive and impractical to try 10 include all the relevant population. This could be:

A RANDOM SAMPLE: This means that every member of the population has an even chance of being selected. People are selected at random (often by computer), for example, every 100th name in a telephone directory. The advantage is that everyone has an even chance of being picked, but not everyone in the population may be a consumer of the particular product being investigated.

A QUOTA SAMPLE: This is when people are selected on the basis of certain characteristics, for example, age, gender or income. Researchers are given a quota, If they are carrying out street interviews, the researchers can choose who to interview, providing they ask a certain number of people with certain characteristics. For example, they may be required to interview 20 people from the age group 10-25, 30 people from the age group 26-45, and 20) people from the age group 46-40. The researchers can then find out the views of these specific groups.

CREATE A GOOGLE FORM, CONTAINING YOUR 10 QUESTIONS AND SEND IT TO THE ENTIRE CLASS TO ANSWER.

--THE SUCCESS OF A NEW TYPE OF ENERGY BAR--

"As this is a food product, it is essential that the firm establishes whether the flavour is desired by consumers, we would prefer QUALITATIVE DATA, as we want to get the taster's detailed reaction to the product, in terms of flavour, texture etc... therefore I would recommend surveying customers opinions via 'STREET INTERVIEWS' in which the product can be tasted. In terms of sampling, I would choose a 'QUOTA SAMPLE' of people representing the characteristics of the target market which are 18-35 years old, who are regularly active, hence we will position our interviewers outside popular health clubs and gyms. I think this is a good idea because it is very important that the customer can actually sample this product and ask questions about the product's ingredients face-to-face, in addition, it also allows the interviewer an opportunity to gauge their body language when they actually taste the product, this way we can be more confident that their answers are accurate, furthermore to avoid the potential for bias on behalf of the interviewer and the possibility that the interviewee answers positively out of politeness, we will also ask each participant to record their feedback on a simple yet confidential written form. I appreciate that this will be very time-consuming and expensive as we need to hire interviewers, however, I am confident that given the nature of the product, this is the best method to avoid a large waste of money and resources"

Using the example above as a template RECOMMEND & JUSTIFY an appropriate SURVEY TYPE & SAMPLING TYPE that OFS could use to gather PRIMARY research on the following proposals. (Mention the pros and cons)

CHOOSE ONE FROM THE LIST BELOW:

• Whether to change the school uniform from BLUE to PINK.

• Whether to start the school day at 10 am instead of 9 am.

• Whether to offer Mr. Bounous a new contract.

• Whether to offer a Vegan meal option in the school canteen.

• Whether to offer A-Levels instead of IB.

• Whether the school's anti-bullying policy is working.

Secondary research, or desk research, is the use of information that has already been collected and is available for use by others. The information may be from either internal sources or external sources.

--WHOLE CLASS--

Mr. Bounous is bored with his work in a large international School. As a creative person, he would like to leave and start up a bubble-tea shop. Mr. B has asked about micro-finance and prepared a cash flow forecast. He has also carried out some market research and found out that the demand for bubble tea is likely to be high during festivals. He thinks he has the right characteristics to be a successful entrepreneur.

Explain one method of primary market research and one method of secondary market research Mr. Bounous could have used.

Method of primary market research:...................................................................................................................................................................................................................

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Explanation: ..........................................................................................................................................................................................................................................................................................................

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Method of secondary market research:...........................................................................................................................................................................................................

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Explanation: .......................................................................................................................................................................................................................................................................................................... .................................................................................................................................................................................................................................................................................................................................................

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Award 1 mark for identification of each relevant method (max 2). 

Award 1 mark for each relevant reference made to this business (max 2). 

Award 1 mark for each relevant explanation (max 2).

[MS]

• The SAMPLE SELECTED — it is unlikely to be truly representative of the total population, but it needs to be as near as is possible. If a quota sample is used, rather than a random sample, it is easier to get more accurate data

• The SIZE OF THE SAMPLE — this is also important. It is not possible to ask everyone in a population, which is why a sample is used. The larger the sample, the more accurate the results are likely to be, but the more expensive will be the research, If only a small sample is asked, the results are unlikely to be as accurate. 'Therefore, the researchers need to decide how many people will give them the accuracy they want and can afford.

• The PHRASING OF THE QUESTION--carrying out questionnaires on a small group of people before using them on a large sample can help to see if any of the questions could be misinterpreted. The questions can then be rephrased and then revised questionnaire carried out on the main sample

• BIAS IN ARTICLES--newspapers sometimes have a bias and important information is left out deliberately. FAKE NEWS!!!

• AGE OF THE INFORMATION — statistics can quickly become out of date, no longer relating to current trends in consumers’ buying habits, but reflecting what they used to be spending their money on.