Market Research (Edexcel GCSE Business)

• Market research is the objective collection, compilation and analysis of information about a market
    
• Effective market research will help the business 
  • To reduce risk when launching new products or entering new markets
  • To identify and understand the future needs and wants of customers
  • To identify potential gaps (market niche's) in the market which can be exploited to increase the sales volume
  • To identify competitors and gauge their potential strengths and weaknesses
     
• Market research helps the business to make informed decisions about the most effective way to use their valuable resources
  
  
• Market research enables the firm to develop the correct marketing mix 
   
• On-going market research helps businesses to keep changing their marketing strategy in line with customers changing needs and preferences

• The process of market research is broadly classified into two categories - primary and secondary research
  
  
• Primary research is the process of gathering information directly from consumers in the target market using field research methods such as surveys, interviews etc
  • This research gathers information which is new and does not already exist in any format
  • The most commonly used methods of primary market research include the use of surveys, interviews based on questionnaires, observation, focus groups and test marketing 
     
• Secondary research involves the collection, compilation and analysis of data which already exists
  • Typical methods include:
    • Using the internet
    • Purchasing market reports from specialist companies such as Mintel
    • Accessing government research which provides useful information e.g The Office for National Statistics (ONS)
       

An Explanation of the Methods of Primary Research

• Market research data can be quantitative or qualitative
   
• Quantitative data is based on numbers and could include financial reports (e.g. sales, costs), market data (e.g. markets share) or summaries of data gained from primary research (e.g. on a scale of 1-10 rate our customer service)
  
  
• Qualitative data gathers descriptions or explanations based on conversations, discussions, impressions, and emotional feelings and is usually gathered through primary research
   
• Both forms are useful and any data analysis should ideally include a combination of the two
   

The Limitations of Qualitative & Quantitative Research Data

Using Social Media to Collect Market Research Data
 

• Traditionally, primary research has been relatively difficult and expensive for businesses to gather
   
• The rise of social media platforms such as Facebook, Twitter, Instagram and TikTok has provided businesses with incredible market research opportunities (and some threats too!)
  
  
• The speed of communication between businesses and customers can be almost instantaneous e.g. by using online polls thousands of responses can potentially be received in several hours
  
  
• The cost of gathering this information can be very low e.g. Online polls take a few minutes to set up and software automatically gathers and analyses the results
  
  
• Social media helps businesses to generate an interactive relationship with their customers which helps to strengthen brand loyalty
  
  
• Customers are also able to feedback quickly on products - or to express innovative ideas about how they want the products to be changed
  • This feedback may help the firm to develop extension strategies in their product life cycle