Market research

Involves gathering, presenting and analysing information about the marketing and consumption of goods and services and helps to reduce the risk of failure.

Purposes:

• Identify and anticipate customer needs and wants: to design products that are likely to sell, they need to identify as precisely as possible the desired features.
• Quantify likely demand: to find out how much of a product is likely to sell to determine whether or not a product is going to be comercially viable. If demand is adequate a business can plan production but if not it might cancel the launch of the product.
• Gain an insight into consumer behaviour: to meet customer needs more effectively.

DATABASES: an organised collection of information stored electronically with instant access, searching and sorting facilities.

QUANTITATIVE RESEARCH: the collection of data that can be measured.

- Commonly collected from surveys of government publications.

- It is open to less interpretation and easier to represent.

QUALITATIVE RESEARCH: the collection of data about attitutes, beliefs and intentions.

- Commonly collected from interviews or focus groups.

- Gives more detailed information but there can be disagreements about the significance of the data.

It would be too long and cost too much money to gather information from every single member in the target population when carrying out research so businesses collect it from a sample of people in the population. However, it is important the views of the sample are represenative of the whole. Sample size affects accuracy of the information: larger=more representative.

- Random sampling: respondents are selected for interview at random meaning all members have an equal chance of being chosen. However, it assumes all members are the same which is not the case so if sample is small it might not have the characteristics of the population.

- Quota sampling: target population is segmented into a number of groups that share specific characteristics and then a certain number of members are chosen from each group to be interviewed. It is more cost effective and useful where the proportions of the different groups within the population are known but results aren't statistically representative and population not chosen randomly.

- Stratified sampling: the sample is divided into segments based on how the population is divided up and then a random sample is chosen from each group but the proportions in the sample must the same as in the population as a whole.