Market research is the process of collecting and analyzing data relating to the demand for a good or service in a specific market. It is used to understand wether the product will be successful and how to is it possible to improve it, as well as analyse market characteristics, such as average prise on market, number of potential costumers and their disposable income.
Depending on how much money you can afford to pay for research and what level of accuracy you need, you can choose one of two research methods.
Depending on how much money you can afford to pay for research and what level of accuracy you need, you can choose one of two research methods.
primary research
Primary research is collection of original data. It involves direct contact with potential or existing customers. It can be:
Accuracy of primary research will always depend sample size, or number of costumers involved:
Sampling.
Also it will depend on sampling methods. There are three different techniques for sampling.
Note that the survey population is unlikely to be the total population as producers are unlikely to be interested in the views of very young children.
For example, if a new magazine is aimed at 12-16 year old girls, it would be pointless to ask the views of a 65 year old man on the magazine. Once the group has been identified, the sample can be selected by using either random or quota methods
- Qualitative. It finds information in numbers;
- Quantitative. It finds out costumers' attitude or resins of their decisions;
Accuracy of primary research will always depend sample size, or number of costumers involved:
- Small sample size = lower accuracy and lower cost
- Larger sample size = higher accuracy and higher cost
Sampling.
Also it will depend on sampling methods. There are three different techniques for sampling.
- Random sampling.
Note that the survey population is unlikely to be the total population as producers are unlikely to be interested in the views of very young children.
- Stratified sampling.
For example, if a new magazine is aimed at 12-16 year old girls, it would be pointless to ask the views of a 65 year old man on the magazine. Once the group has been identified, the sample can be selected by using either random or quota methods
- Quota sampling.
Secondary research
This is the use of information that has already been collected and is available for others to use.
This could come from internal sources eg sales department, opinions of customer services staff or external sources such as newspapers or the Internet.
Some firms specialise in producing market “intelligence reports” which firms can purchase.
Secondary research has the advantage of being much cheaper than primary research as someone else has already done most of the work (although purchasing specialised market intelligence reports can be very expensive).
However, the firm using it would not know how it has been collected. Also, information quickly becomes out of date as trends change and so will not be useful to the firm.
This could come from internal sources eg sales department, opinions of customer services staff or external sources such as newspapers or the Internet.
Some firms specialise in producing market “intelligence reports” which firms can purchase.
Secondary research has the advantage of being much cheaper than primary research as someone else has already done most of the work (although purchasing specialised market intelligence reports can be very expensive).
However, the firm using it would not know how it has been collected. Also, information quickly becomes out of date as trends change and so will not be useful to the firm.
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