The Use of Data in Market Research (Edexcel IGCSE Business)

• Market research data can be quantitative or qualitative
  • Both forms are useful and any data analysis should ideally include a combination of the two
     

• 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
    

The Limitations of Quantitative & Qualitative Research Data

Limitations of Quantitative Data

Limitations of Qualitative Data

Numerical data may be out-of-date, especially in dynamic markets   Data analysis and interpretation is a complex skill that is likely to be lacking in smaller businesses Looking at a small amount of data and then extrapolating results can provide wrong assumptions on which to base decisions Numerical data does not provide reasons for outcomes e.g. data may reveal sales volumes are falling, but not the reason for the decline

Bias may mean that analysts can interpret responses in a particular way Respondents may lack awareness or language skills to explain preferences accurately   Respondents in focus groups may be influenced by the responses of others, or not provide accurate information Qualitative data is difficult to present in graphs and charts so may not be easily understood

The use of 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!)
  
  

Benefits of the use of Social Media to Collect Market Research Data

Benefit	Explanation
Speed	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
Cost	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
Relationships	Social media helps businesses to generate an interactive relationship with their customers which helps to strengthen brand loyalty
Feedback	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

• Gathering and analysing reliable data is critical to a business
  • It supports decision-making and reduces risk
  • It helps businesses to set realistic objectives and manage performance 
    
    

• The reliability and accuracy of market research depend upon a range of factors

Diagram: Factors Affecting the Reliability of Market Research data 

The reliability and accuracy of market research data depend on factors including the time and place of research, who carries out and take part in the research, the potential for bias and how questions are phrased

 

• How questions are phrased in questionnaires or other tools used to conduct surveys
  • E.g. Market researchers should avoid leading questions 
    
    
• How carefully the sample is selected
  • Including its size, types of respondent chosen and how closely these reflect the intended target market
    
    
• Who conducts the research?
  • Do researchers have the experience, research skills to conduct research effectively?
  • Is the source primary or secondary?
    
    
• Potential for Bias when conducting research or analysing results
  •  Presenting results in a particularly positive or negative way can impact decisions made
  • Personal preferences should be avoided
    
    
• When and where the research is conducted
  • Customer tastes, fashions, economic conditions and technology change, giving data a relatively short period of usefulness 
  • Customers in different geographic areas can have very different opinions