Market Research

This can be defined as the systematic collection, analysis and interpretation of data relating to demand for a good or service in a specific market, competitors and the market.

The need for market research:

1. To predict future changes.
2. To reduce risks associated with new products.
3. To explain patterns in sales of existing products.
4. To assess the choice of consumers.
5. To assess the market size and trend.
6. To assess strengths and weaknesses of the business and its products.
7. To assess promotion used and its effectiveness.
8. To analyse existing channels of distribution and its effectiveness.
9. To analyse competitors and their USP.
10. To analyse existing channels of distribution and its effectiveness.
11. To consider the preferences of consumers regarding packaging.

Data can be collected from 2 sources:

• Field Research (Primary Research)
• Desk Research (Secondary Research)

Field Research

A field research involves observing and questioning people.

It involves collection of data directly from a sample of customers.

Data collected under a field research is original in nature or first hand data.

Use for a specific purpose.

Primary data can be divided in qualitative and quantitative research.

• Qualitative Research involves research in the customer buying behavior. The main technique of collecting this data is interview with the individual or group of them.

• Quantitative Research involves research that leads to numerical results that can be statistically analysed. Research techniques: Observation and recording, Test-marketing, customer surveys.

Advantages of Primary Research

• Up to date and therefore more useful than most secondary data.
• Relevant: Collected for a specific purpose.
• Confidential: no other business have access to data.

Disadvantages of Primary Research

• Costly 
• Time consuming
• Doubts over accuracy and validity

Desk Research

Data collected from desk research are those which have already been collected by other organisations.

Main sources of secondary data:

• Internal company records
• Government publications

• University Research

• Market intelligence reports

• The internet

• Local libraries

• Publication of Trade Associations, Stock Exchange.

Advantages of Secondary Research

• Obtained very cheaply
• Obtained very quickly
• Allow comparisons of data

Disadvantages of Secondary Research

• May not be up to date
• Data accuracy and methods of collection is unknown
• May not be used for existing purpose

Benefits of Market Research

1. Better decision making by management
2. Better utilisation of resources 
3. Production is carried out according to the needs of the market
4. Less wastage and increase in efficiency
5. It helps to identity marketing gaps
6. It helps to prepare good marketing budgets
7. It helps to select the right advertising media
8. It helps to select the right channel of distribution
9. It helps decide the right pricing strategies
10. Helps organisation to be more aware of the changing market needs