Purposes of MARKET RESEARCH
To identify and understand customer needs
To identify gaps in the market
To reduce risk
To inform business decisions
Benefits of SURVEYS
Can collect large amounts of information without using manpower e.g. the buttons in shops or a pop-up on a website
Not constrained by geographic boundaries e.g. internet surveys can include international customers
Disadvantages of SURVEYS
Can include data from unhappy customers-mostly (surveys on hotel rooms or restaurants are usually only filled out by those who want to complain)
Can include poor data (e.g. if customers in the shop keep pressing the unhappy button)
Drawbacks of QUESTIONNAIRES
Questions not personal to each individual respondent e.g. are you a dog owner may get the response ‘no’
Low rates of return customers don’t like giving out their details
Benefits of QUESTIONNAIRES
A cost-efficient method especially if carried out online
Can be targeted at past customers e.g. you had your car serviced at our garage, was the standard of customer service to the satisfaction of the customer
Benefits of FOCUS GROUPS
Gathers lots of data about how customers feel about a product, their opinions (qualitative data)
Brings a group of potential customers together to talk about the proposed new product or service idea
Drawbacks of FOCUS GROUPS
It may be hard to persuade people to take part
Views of small numbers of customers may not reflect the views of everyone
Can be expensive
Complex to set up and manage
Benefits of OBSERVATION
Respondents don’t know they are being observed and so they will shop naturally
Greater accuracy than direct questioning, no recall error
Gives researchers an inside perspective into buying behaviour e.g. only women bought the Pepsi Max
Drawbacks of OBSERVATION
The only data gathered in the form of the notes from the observer so may be subject to bias or their own opinions
Very time consuming, observers have to sit for hours watching customer behaviour
Benefits of TEST MARKETING
Reduces the risk of failure when launching a new product onto the market
An opportunity to make sure the marketing mix is correct before the full product launch
Avoids investing in a product that won’t sell
Drawbacks of TEST MARKETING
The competition get an opportunity to see the product and perhaps make their own version
Test market may not correctly represent the whole market
Delays in full launch will reduce revenues
Benefits of INTERNET DATA
Cost-effective (free)
Availability of information
Great to see what competitors are doing (and not doing)
Look at influencers to spot trends
Drawbacks of INTERNET DATA
Data may be out-of-date, and difficult to know when a website was written
Information needed may not be on the company website
Drawbacks of MARKET REPORTS
Much of the information published is historic and may be out-of-date
Very expensive
Not specifically designed for the company so may not be useful
Competitors have access to the information
Benefits of MARKET REPORTS
Secondary data is already collected, analysed and submitted in a report, which can then quickly be used for decision-making. Important in dynamic or competitive markets.
Can give insights into a market and all the actions of competitors
Can give insight into key industry trends
Benefits of GOVERNMENT REPORTS
Information is freely available on the Internet
Can easily be searched to narrow down the information
Drawbacks of GOVERNMENT REPORTS
Information collected is not for a specific company so the data may not be useful
Results may be out-of-date
Competitors have access to the same information
