Your SlideShare is downloading. ×
31 Market Research
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

31 Market Research

782

Published on

Published in: Business, News & Politics
1 Comment
1 Like
Statistics
Notes
No Downloads
Views
Total Views
782
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
8
Comments
1
Likes
1
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. MARKET RESEARCH 3 3.1 CONDUCTING MARKET RESEARCH; DRAWING THE RIGHT CONCLUSIONS . Doing Market Research . Market Research; Examples Of Information Needed . Market Research 1 . Market Research 2 . Some Market Research Information Sources . Analysing The Competition . The SWOT Analysis P 95
  • 2. CONDUCTING MARKET RESEARCH; DRAWING THE RIGHT CONCLUSIONS 3.1 DOING MARKET RESEARCH Market research means you collect and analyse information about the market, your customers and competitors, then draw up or change plans accordingly. You can do desk research and/or field research. Desk Research Field Research This makes use of information already Going out and talking to people collected (’secondary information’). It can (customers and competition), counting use information from inside the organisation them or watching what they are doing via: (the ’Internal Market Audit’) or information . Observation of peoples’ reactions from outside (the ’External Market Audit’) to your product or competitor using the following sources: . Interviews on the street or at home, . Yellow Pages, Thomson Local, Kelly’s using written questions Directory, or other company information . Phone interviews, short and to the point . Trade association yearbooks, trade . Postal surveys fill-in questionnaires, directories, trade press and newspapers best used with existing customers . Market surveys, MINTEL reports and . Omnibus surveys by commercial market market reviews surveyors, pay per question asked . Local authority, Chamber of Commerce . Focus groups of typical customers, and TEC surveys cheap and effective . Government statistics, including census, social surveys and purchasing information . Competitor literature and publicity . Books on marketing, selling and customer behaviour P 96
  • 3. CONDUCTING MARKET RESEARCH; DRAWING THE RIGHT CONCLUSIONS 3.1 Plan Of Action Remember to make these decisions according to what you are trying to decide No market research can occur until a plan or achieve. Will the information arrive in of action has been drawn up. Note this is time to be used? Will you have to change different from the Marketing Plan. For each plans as a result? item decide: . How will the information be obtained? Random and informal opportunities to . Who will do the research? acquire information are also useful: chatting with customers, suggestions for changes . What can you do yourself and what will to a product or service and conversations you need help with? with suppliers. Look out for changes, . Where will you obtain the information? patterns and trends. . How much will it cost (in time and money)? . When will it get done (draw up a timetable and deadlines)? P 97
  • 4. CONDUCTING MARKET RESEARCH; DRAWING THE RIGHT CONCLUSIONS 3.1 MARKET RESEARCH; EXAMPLES OF INFORMATION NEEDED Size of Market The Product What is the total market - industrial, Who uses the product? consumer, home and overseas? Frequency of purchase? Is it growing or shrinking? Who else could use the product? Are there any regional biases How can it be improved? or preferences? What do customers think of it? What are the seasonal influences? Is it branded? Where are the big users? Is the price right? Is it a well developed, saturated market or are new products entering it? Are specials produced? Is it prone to fashions, short runs, Can it be personalised? cyclical changes? What are the returns? Is new technology likely to alter the market? What new products are envisaged and What changes may affect demand? how will they tie in with existing lines? The Competition The Customer Who are the main competitors and what How can you reach them? market share do they enjoy? What is the customer profile? What is their product range and what What are their needs? do customers like? What are their strengths and weaknesses? Where do you have a competitive edge? Your Own Performance Where do you make the most profit and where is the potential growth? What extra lines or service could be sold? How do you promote yourself and compare with your competition? P 98
  • 5. CONDUCTING MARKET RESEARCH; DRAWING THE RIGHT CONCLUSIONS 3.1 MARKET RESEARCH 1 Any organisation intending to introduce a new product or service, for instance a group of people starting out in business, needs to establish that there is both a demand for the product or service and that conditions exist for it to be provided. Market research provides the necessary information. There are four stages to any market research. 1 : Deciding What Questions 2 : Drawing Up A Research Plan Need To Be Asked You must first determine what you are The most useful questions that could be trying to find out, who you are finding asked are: ’how often?’, ’how much?’, this information out from, where the ’when?’, ’where?’, and ’why?’. A group information can be obtained and how best setting up a restaurant might ask: to obtain it. Then tasks must be drawn up matching these aims, responsibility . How often do people eat out assigned, a timetable set and a method at restaurants? for analysing and reporting the information . How much do they spend/are they (if necessary) agreed. willing to pay? . When do people eat out? . Where do they go to eat out? 3 : Collecting The Information . Why do people eat out/why would This depends on information, either primary information (that you obtain directly) or they buy our meals? secondary information (that other people In getting this information, it may be useful have found out). to know who you are getting the information Primary information can be collected from. In this way you can decide if particular by personal interviews, telephone kinds of people act in particular kinds of interviews, or postal questionnaires. ways: ’Young people seem to like fast food’, It can include street surveys, talking to ’older people spend more money’, ’people groups of potential customers, observation with low incomes only eat out on special (especially of competitors), talking to similar occasions’ etc. Your marketing strategy organisations in other areas and talking may try to make use of these patterns to suppliers or other people in the industry of behaviour. or sector. P 99
  • 6. CONDUCTING MARKET RESEARCH; DRAWING THE RIGHT CONCLUSIONS 3.1 Secondary information includes The Personal Interview statistics on the product or service area, Very time consuming and not much socio-demographic information, competitor use unless, used with a questionnaire, it analysis, trade directories and journals, provides an opportunity to market or sell government statistics e.g. the census. the product/service to the interviewee. All of these should be in or available from The interviewee is made aware of the the reference library. The Yellow Pages product or service, interest is created and or Thomsons, trade associations, the local they may be persuaded to buy or use the Council, research organisations, competitor product/service. brochures, the Chamber of Commerce and local enterprise agencies may all provide The Telephone Interview useful information. Perceived as low cost and effective but The starting point for market research needs careful preparation to reach the should be secondary information since this target group. Can be used to obtain sales has already been gathered, organised and or users but people called may be hostile analysed. But secondary information may or deflationary. not be enough. Primary information is Observation obtained in the following ways: Just looking can tell you, for instance, The Questionnaire what people are doing, how they are The most common method but buying, who they buy from, where they usually is disappointing. People see it buy and how often. as a waste of time and intrusive. Postal questionnaires have response rates of 1-5%. The questionnaire works best when 4 : Analysing And it is either face-to-face or the questionnaire Reporting The Information has been targeted on key individuals who, Analysis must begin by returning to the perhaps through a letter or telephone call, original question of what you were trying to have been informed about the proposed find out. The information must be organised product or service and see some advantage in an understandable way. You must be able to them (e.g. saving money) through ’being to present this information to others so sold’ on it. they can understand it and draw the same The Focus Group conclusions. Your analysis must be honest. A group of ’ideal’ customers or users who represent the kinds of people you are trying to reach give their views on the quality of the product/service, the price, the publicity material, the product’s usability and its acceptability. This can be a relatively cheap method (especially where customers or users exist already) of finding out consumer attitudes to a product or service. P 100
  • 7. CONDUCTING MARKET RESEARCH; DRAWING THE RIGHT CONCLUSIONS 3.1 MARKET RESEARCH 2 The Chartered Institute of Marketing’s Customer-Focused Marketing definition talks about satisfying needs Marketing is about serving the customer, /requirements. This definition is expanded placing them first and recognising that to include profits. customers have many product and service providers from which to choose. In simple terms: As potential business owners you will be 1 : Identifying asking yourself, ’where are we now?’, Finding out what potential and current ’where do we want to get to?’ and ’how customers want now. do we get there?’. You might approach the same questions from the customer’s point 2 : Anticipating of view. Finding out and forecasting what they will want in the future. . Who are our existing/potential customers? 3 : Satisfying . What are their current and future needs Providing products or services that meet and wants? customers needs, and ensuring this is . How can we satisfy these needs being done to a satisfactory standard. and wants? . Can we provide a service or product our customers will value? . Do we have good communication channels to talk to our customers? . Can we deliver a competitive service/product? . Why should our customers buy and continue buying from us? Within the limits of your budgets and resources, you must try to find the answers to these questions. P 101
  • 8. CONDUCTING MARKET RESEARCH; DRAWING THE RIGHT CONCLUSIONS 3.1 The Purpose Of Market Research Kinds Of Market Research The purpose of market research is to There are two categories of market provide you with basic information about research - quantitative or qualitative. your potential market to enable you to Quantitative Research make informed decisions. Any information which can be expressed Ask yourself whether you have enough using numbers as a measure is considered information about your customers, quantitative e.g. sales information, competitors, and trends in the industry accounting details and statistics. in which you intend to trade. Qualitative research Market research will help you to establish the following: This is concerned with information that is based on description e.g. description of . Who will buy your products/services? consumer behaviour, market segments . Who buys your competitor’s and product performance. products/services? . What sales level you can realistically Market research is not a one-off exercise undertaken before trading. You should forecast? undertake market research: . What are people prepared to pay for . Before entering the market the products/services? . When expanding into new markets . What is the size of your potential market? - either product or geographical . What the reaction would be to the . Continually when operating the business introduction of new products/services? . Where the products/services are bought currently? Doing Market Research . Where you should sell your In order to obtain information you will products/services? have to consider two areas: . Why people buy specific 1 : Desk Research products/services? 2 : Field Research The results of this market research will enable you to make informal decisions, Desk Research react to changes in the market place Desk Research is the analysis of published (e.g. legislation or technological advances) material. It is usually the starting point of and confirm or disprove any assumptions any research. Its main benefits are that it you may have. is quick and inexpensive. Its main failing is that the material is often dated and not comprehensive. P 102
  • 9. CONDUCTING MARKET RESEARCH; DRAWING THE RIGHT CONCLUSIONS 3.1 Information for desk research can Alternatively, try to access the information be obtained from external or internal through libraries. business data. Examples include: Sources of published data include: . Sales information . Competitor information Trade information produced by trade associations, in trade press reports . Communication with customers and surveys. There are also specialist (face-to-face, mailshots, telephones etc.) publishers who compile reports and . Reference libraries undertake surveys in specific markets. . Chamber of Commerce, Business Links Limited companies produce annual /Business Eye etc. company reports and accounts that can be obtained through Companies House. Internal business data, however, is mostly Shareholder reports are also useful. applicable to existing businesses as new businesses will not have data to base their Useful information can be gained from work on. government publications such as: . Census data Information You Need To Gather . Family expenditure surveys You will need information on: . The market size (how big is the market?) . National income statistics . The market scope . Trade and manufacturing trends (how wide is the market?) (in ’trade magazines’) . The market share (both yours and Competitors’ literature can also be your competitors’) a valuable source of information. . Selling methods It is worthwhile trying to identify someone . Prices and discounts in the same line of business in another . Channels of distribution area who may be prepared to give you information and advice. Try contacting (how to distribute?) trade and professional associations, banks, . The future of the market business clubs etc. that are related to your (what might happen?) business field. Do they have a directory . The factors which influence buying or have local or national support groups? decisions (why the buyer decides to buy?) What other services and resources can they offer and at what cost? Obtain as . Who makes buying decisions? much information as possible - in particular In addition you need to profile your concerning: potential customers, regarding age, . Your existing/potential customers location, income etc. There is a vast array . Your competition of published information available. This . Your suppliers information may be specific or general. Some may carry a cost for purchasing. . The sector in which you intend to compete P 103
  • 10. CONDUCTING MARKET RESEARCH; DRAWING THE RIGHT CONCLUSIONS 3.1 Field Research The main advantage of face-to-face conversation compared to telephone Field Research is the collection of new or conversation is the scope for personal additional data. This involves using one of interaction: it gives you the chance to the following research techniques: strike up a relationship which can lead to . Surveys an open question and answer discussion. . Observation Observation To be of value the information must be Observation is another method of accurate, current, sufficient and relevant. conducting field research. Observation Surveys can be where customers are observed, or it may involve visiting exhibitions or counting Surveys can be divided into three types: heads. As a research method it can be 1 : Postal surveys are useful in obtaining useful in obtaining quantitative data. It is quantitative information. The main also possible to pose as a customer to drawback of this method is that there obtain information from your competitors. is often a poor response rate and there Getting out and about in the car to find are few opportunities to follow them up. potential customers and competitors comes 2 : Telephone surveys are a good way of under this heading. interviewing people. The main advantage of Test marketing is a technique more often telephone interviewing is that it is relatively used in product research. It literally means cheap and fast. Their success depends on testing out the product or service with a speaking to the right person and on them group of people and noting what they think being willing to co-operate. The main about it. drawbacks to this type of interview are: Whichever method of obtaining information . The interviewee can get interrupted you choose you will have to produce a - this may be inconvenient questionnaire. Questionnaires are used . The interviewee has no proof of who you to find out all types of information and to are - they may think you are a competitor make sure that you are asking for the same . Details sought on the phone may not information from all the people that you be to hand deal with: . Facts However, phoning up competitors and posing as a customer to get information . Knowledge about prices, service details, delivery times . Intentions and payment terms can be highly useful and . Opinions effective in helping you design products and services that can compete in the market. . Attitudes . Motivation 3 : Personal interviews are more expensive than either postal or telephone interviews . Lifestyle due to the time involved but, on the basis You will need to ’sell’ the idea of of information obtained, they can be the completing the questionnaire, to get most useful. people to participate. P 104
  • 11. CONDUCTING MARKET RESEARCH; DRAWING THE RIGHT CONCLUSIONS 3.1 SOME MARKET RESEARCH INFORMATION SOURCES A lot of these sources can be found on the Web or in your local reference or business library. The A-Z Of UK Marketing Data help by indicating trends and tracing the progress of many individual products This provides basic marketing data for manufactured by firms in many industries. several hundred UK markets, from adhesives They are published in three main series: to zip fasteners. It is arranged by product The Production Monitors, The Service and area, size, production, imports and exports. Distribution Monitors and Miscellaneous Monitors. Annual Abstract Of Statistics This is a good source of all UK statistics. Annual Census Of Production Monitors Figures are given for each of the preceding These cover virtually every sector of ten years, so trends can be recognised. industry and include a variety of quite detailed information on UK production. BBC Data Enquiry Service This is a personal information service Guide To Official Statistics drawing on the world-wide resources of the This is the main guide to all Government BBC. It is an inexpensive and easy way of produced statistics, including ad hoc reports. checking facts and drawing on a statistical data bank which covers people, products, Key Note Publications countries and events. You will be charged for enquiries. Over 100 market sectors are covered. These are comprehensive reports containing a British Rate & Data (BRAD) detailed examination of the structure of an industry, its distribution network and its This lists all the newspapers and periodicals major companies. They include an in-depth in the UK and Eire which carry advertising. analysis of the market covering products It gives their frequency, circulation volume, by volume and value; market shares; foreign price, executive names, advertising rates trade; an appraisal of trends within the and readership classification. market; a review of recent developments within the industry; a financial analysis of Business Monitors named major companies; and an appendix This is the medium through which the listing further sources of information, recent Government publishes the business statistics press articles, other reports and journals. it collects from UK firms. The Monitors can P 105
  • 12. CONDUCTING MARKET RESEARCH; DRAWING THE RIGHT CONCLUSIONS 3.1 Kelly's Manufacturers Overseas Trade Statistics And Merchants Directory Published by the Department of Industry This directory has an alphabetical list of & Trade, these provide a monthly statement manufacturers, merchants, wholesalers and of UK imports and exports by volume firms. It gives basic information on each. and value for each product group and In addition, entries are listed by trade individual country. classification and it has a section listing British importers and what they import. Reports Index Exporters are listed by the products they This is an index of reports in every field export and the countries in which they sell. published and available for sale. Its sources include Government publications, HMSO Kelly's Regional and other market research organisations, Directory Of British Industry education establishments etc. This is published in eight volumes and provides a town by town guide to industry The Retail Directory and the products and services offered. This gives details of all UK department stores and private shops. It lists the names Key British Enterprise of executives and merchandise buyers as This contains information on the key UK well as basic address information. companies that are responsible for 90% of industrial expenditure. Each entry gives Specialist Libraries basic information on the company, but also Apart from your local library, there are branch addresses, products by SIC codes hundreds of libraries connected with (Standard Industrial Classification code), Government departments, major industrial sales turnover and directors names etc. companies, trade organisations, research centres and academic institutes. Kompass Two publications that list these specialist This is published in two volumes. Volume 1 libraries are: is indexed by product or service to help you . ASLIB Economic And Business find suppliers and indicates whether they are manufacturers, wholesalers, or distributors. Information Group Membership Directory Volume 2 gives basic company information www.freebizinfo.org on the companies identified in Volume 1. . Guide To Government Departments And Other Libraries Office Of Population, Census And Surveys This office produces demographic statistics for each county in England and Wales from the census. They provide data not only on total populations in each area, but also on occupations, economic groups etc. P 106
  • 13. CONDUCTING MARKET RESEARCH; DRAWING THE RIGHT CONCLUSIONS 3.1 ANALYSING THE COMPETITION Do not assume you have no competition - somebody will possibly be offering similar products and services. Be objective : acknowledge if a competitor is good. Use this grid to analyse the competition Name Better Or Worse What Is The Main How Is Their Higher, Lower Location? Selling Point? Service Or Or Comparable Product Better Prices? Than Yours? P 107
  • 14. CONDUCTING MARKET RESEARCH; DRAWING THE RIGHT CONCLUSIONS 3.1 Look at your findings. What are your competitor's strengths and weaknesses compared with yours? How will you compete with them in the market? P 108
  • 15. CONDUCTING MARKET RESEARCH; DRAWING THE RIGHT CONCLUSIONS 3.1 THE SWOT ANALYSIS A SWOT Analysis is a way of understanding and organising information about both your organisation and the environment. It focuses on what is important and excludes what is not. Unlike market research it requires you to make decisions about information: what is important and what is not, what affects you and what does not, what weight you will give to particular problems or situations, what you will do about them. A SWOT Analysis is also used to assess Weaknesses information about competitors. What are . Can you exploit poor quality or low their strengths and weaknesses? What appeal? Why do these conditions exist? opportunities are they able to make use of? Is low quality a weakness (check quality What are the threats to your competitor’s -price relationship)? business and how would they be able to . Is there demand for different products? respond to these threats. What threats could you generate? The kinds of information you Does the range match demand? need to collect and analyse are: . Is the price too high or low? Is the pricing strategy per product correct? Strengths Does promotion strategy match the . Product quality and customer appeal profile, product and price? Where is . Product range the product sold and is it an effective and accessible location? . Market mix: price, product, promotion . Is purchasing casual? Has poor and place availability, quality, or reliability . Personnel: skills, costs and flexibility affected customer loyalty? . Location/accessibility . Is the competitor well-known? . Reputation and customer loyalty Does it dominate? . Market position . Is it cash-rich, or have a strong asset-base? . Resources: money, skills, information Can it raise money easily? How well does it use resources? and communication P 109
  • 16. CONDUCTING MARKET RESEARCH; DRAWING THE RIGHT CONCLUSIONS 3.1 Opportunities . Can you introduce new products or W : Weaknesses remarket existing ones to seem new? . What you don't know or don't do well Is there a gap in the market? . Things which hold you back . Can you sell more cheaply? Can you offer e.g. lack of certain skills a better product-price mix? Are your costs lower? Or production methods more . Poor marketing or sales techniques efficient? Do you have spare capacity? . A poor or over-priced product . Do you have resources that can be used . Lack of experience in business or used more efficiently? or this field of business . Are there opportunities to co-operate? Or joint market? . Is the political, economic, social, or technological environment changing O : Opportunities to your advantage? . Changes in the business environment Threats giving you an advantage . Can your competitor offer better quality, . Market opportunities lower price, better marketing, or a higher e.g. a rival business closing ’added value’? . Will legislative, political, economic, . Untapped demand for a product or service technological, commercial, personnel, resource level, or financial changes . A possible new business relationship threaten your market? The SWOT Analysis T : Threats . Sudden changes in the business S : Strengths environment e.g. price rises or . The things you are good at new regulations e.g. marketing or teamwork . Inability to respond to/cope . The things on which the business relies with change e.g. good design skills or lower prices . New competitors or better products . The advantage you have you can't compete with over competitors . Relying on one or only a few . The resources available to you customers for your income P 110
  • 17. CONDUCTING MARKET RESEARCH; DRAWING THE RIGHT CONCLUSIONS 3.1 SWOT Analysis Date: Under each heading list the main things that apply to your proposed business today. S : Strengths W : Weaknesses O : Opportunities T : Threats P 111

×