> Respondents have more time to think.
> Detailed responses.
> Can get opinions.
> Respondents give full attention.
> Flexible.
> Allows Probing.
> Trust can be built up to get more reliable data.
Disadvantage:
> High cost.
> Time consuming.
> Risk of bias.
> Requires interview skills.
Test Markets:
The idea of test markets is to reduce the risk for a business which is offering a new product. This involves testing the product in a restricted section of the market. It is also used to test cost strategies too. If the product is unsuccessful then it is not as great of a loss as it would be if it was released into the whole market.
Advantage:
> Reduces Risk
Disadvantages:
> If successful it business may feel they have lost money through time being wasted on something that wasn’t necessary.
Telephone Interviews:
This allows the interview to be help over the phone which makes it cheaper to carry out than private interviews. It can also be carried out over a greater geographical field. These form of interviews a largely distrusted by the public which makes the response sometimes poor. Although it has a greater response that postal surveys because the public are not inconvenienced by the time it would take to post the survey back.
Advantages:
> Sampling less likely to be biased.
> Saves Time.
> High Response rate.
> Cost Limited to time on the phone.
> Allows probing.
> Large geographical Area.
Disadvantages:
> Questions are more limited than those of postal surveys.
> Respondents have less time to consider questions.
> Data may not be available easily.
> Instruction of privacy
> Can be time consuming.
Internet feedback:
This may involve posting a survey on the internet; it is also cheaper than other forms of market research which is a great advantage. It is also easier for the public because people are more willing to take part in the survey. It is usually taken part via email.
Advantage:
> Cheap compared to other methods
> No international boundaries
> Versatile and quick
Disadvantage:
> Incomplete directory of names
> Unrepresentative sample
> Briefness of e-mail responses can be a problem
> Respondents select themselves
> Little control over sample
Secondary Data
Secondary data is usually referred to as desk research. It is the use of data which another company or source has collected and using it for your own purposes. It is also usually used for a purpose other than that it was collected for in the first place. There are many sources of desk research, some include:
Internal:
> Sales figures
> Customer Reports
> Trend data
> Sales reports
> Cost data
> Company report
> MIS report
External:
> Government Published Data:
> Trade Published Data:
> Chamber of commerce:
> Directories
> Annual Reports
> Competitor information
> Commercial publications
> Retail audits
Stage four:
I have decided to use internet feedback. I am planning on posting a bulletin with a questionnaire on Myspace.com Myspace.com is a networking website and it will allow me to reach Mobile phone users throughout the country. It is also cheap and I will be able to analyse the results easily.
Stage 5
There are a number of different market research methods open to me. It is important to make the right decision when choosing the research method, for this reason I have evaluated each method.
Random Sampling
Random sampling is sometimes known as probability sampling, this means that each member of a group being chosen. They are selected at random, i.e. out of a hat. Modern technology such as computers allows companies to produce random lists of numbers which are then used as the basis for selecting a sample.
Advantage:
> It is not bias because it is choosing people at random
Disadvantage:
> Small samples may not have the same characteristics as the population on large.
> It can be expensive and time consuming to draw up lists of the whole population. To reduce businesses sometimes locate a random sample to choose one in every 10 or 20 names. This is known as systematic sampling, which is less random.
Stratified random sampling:
This is a popular sampling method because it makes the sample more representative of the entire group. The population is slit into segments or strata based on previous knowledge about the population, i.e. income. Within the segments, the researcher chooses the sample randomly , making sure that all groups are in proportion to the whole population.
Advantage: They aren’t biased because although they are splitting the population into segments they are choosing randomly within that segment.
Disadvantages: Can be expensive like random can be, also time consuming.
Quota Sampling
This method involves segmenting the population into a number of groups which share the specific characteristics. Usually based on age or sex of the population and interviewers are then given targets on how many interviews they must carry out within the segments. For example, the interviewer may be asked to interview 40 males between the age of 18 and 25, or 20 females between the age of 45 and 60. Once the target has been reached no more people are interviewed within the group. Basically Quota sampling is based on numbers.
Advantage:
> It is cheaper than other methods to carry out.
> Works well when proportions of different groups within the population are known.
Disadvantages:
> They are not statistically representative of the population and are not randomly chosen.
Cluster Sampling:
The market researcher separates the population into ‘clusters’, i.e. Geographical areas. A random sample is then taken from the cluster, and then representative of the population. This is usually used for quick surveys such as opinion polls.
Advantage: Quick to carry out
Disadvantage: The random sample within the cluster may not be representative of the population.
Snowballing
Starting with an individual or group, the market researcher uses these contacts to develop more – hence ‘snowballing’. Businesses only use this when other methods are not possible, due to the fact that samples built up by snowballing cannot be representative. Highly secretive businesses such as those within the arms trade and business that offer a highly specialised product may rely on this for example. This is because they have a very limited customer base.
Advantage: Affect for business which are highly specialised and have a low customer base.
Disadvantages: Very time consuming.
Stage 6
Selection of methods of analysis is an important part of Market Research because it allows the market researcher to relate the information they have gained, to the business. It allows them to communicate easier. There are many ways of analysing the results:
> Bar Charts
A bar graph is a visual display used to compare the amounts or frequency of occurrence of different characteristics of data. This type of display allows me to:
- compare groups of data, and
- to make generalizations about the data quickly.
> Line Graphs
Line graphs compare two variables. Each variable is plotted along an axis. A line graph has a vertical axis and a horizontal axis. So, for example, if you wanted to graph the height of a ball after you have thrown it, you could put time along the horizontal, or x-axis, and height along the vertical, or y-axis.
Each type of graph has characteristics that make it useful in certain situations. Some of the strengths of line graphs are that:
-
They are good at showing specific values of data, meaning that given one variable the other can easily be determined.
- They show trends in data clearly, meaning that they visibly show how one variable is affected by the other as it increases or decreases.
- They enable the viewer to make predictions about the results of data not yet recorded.
> Pie Chart: A pie chart is a circular chart divided into sectors, illustrating relative magnitudes or frequencies. In a pie chart, the arc length of each sector (and consequently its central angle and area), is proportional to the quantity it represents. Together, the sectors create a full disk.
Averages:
Another good way of analysing the results of market research is averaging:
- The mean is the total number divided by the number of respondents.
- The mode is the most frequent answer
- Medium is the middle response.
Final Update on Decisions made:
Stage 7
It is important that the questionnaire is designed with questions that everyone can understand to avoid false feed back; the questions need to be laid out in a way that the customer understands how to correctly fill them in. I have designed the questionnaire in order to get as many customers to fill them in and send them back as possible. I understand that most people won’t spend their time filling in questions without being offered anything in return – for this very reason, if I was an employee of CPW, I would offer a 5% discount on any product to capture their attention. Bellow is a discussion on each question in the questionnaire.
I have chosen to produce a questionnaire and post it on the internet. This will allow the greatest number of people to respond as it is open to the entire country. In designing the questionnaire it I will constantly make reference to The Carphone Warehouse’s Aims and Objectives.
This is a personal question but it will allow me as the market researcher to segment the respondents on the basis of sex.
This allows me to segment the respondents into age ranges, which will help me come to conclusions with the rest of the questions.
This is a closed question meaning it has a limited response. It is an important opening question because The Carphone Warehouse are a mobile phone company. If the respondent doesn’t have a mobile phone they should seek to find out why.
This is an open question. It allows the respondent to give their views and opinions. It is good to have a balance of both open and closed questions. This question will give me information about why they don’t own a mobile phone which may increase The Carphone Warehouse’s customer base if they can reach out to these people who don’t own mobile phones.
This will allow me to identify how many people who own mobile phones have even bought from The Carphone Warehouse at some point. If they haven’t it will demonstrate weakness in the business which may affect their ability to achieve aims and objectives.
This is an open question which allows the respondent to give their opinion and reason why they haven’t bought from The Carphone Warehouse. It may be because of bad recommendations or just because they haven’t got a shop near them.
This is another open question which seeks to find out why the respondent hasn’t purchased from The Carphone Warehouse, if they haven’t in the past. If it shows that respondents live far away from Carphone Warehouse stores there will be an increased need to open new stores. If they don’t have enough stores this shows itself as a weakness and may affect their ability to achieve aims and objectives.
This will show whether the internet market is more popular than face-to-face sales. It may also demonstrate the need to improve The Carphone Warehouse’s website. This will affect their ability to achieve their objectives because if there is a market which they aren’t taking advantage of then their profit will be lower and it will affect all there aims and objectives.
This is an open question which allows the respondent to name freely where they bought their last mobile phone from. If it is not The Carphone Warehouse then they will need to find out why. This will affect their ability to achieve aims and objectives because if people are not purchasing from them and are going elsewhere they are not beating there competition so their objective to increase market share will not be met, and neither will there objective to increase customer base. If they do not meet these objectives then their profit will fall, which will intern affect all other objectives.
This will show The Carphone Warehouse what there main competition is. The market researcher should now seek to find out why The Carphone warehouse are not the best mobile phone retailer.
Depending on the results it will show the success or failure of The Carphone Warehouse’s customer service. This may give them areas to improve upon. This will affect their ability to achieve their aims and objectives because if they do not improve certain things they cannot produce enough profit to reach their objectives. It also may pose and objective for the future.
This will demonstrate how successful the respondent thinks The Carphone Warehouse is. If the response shows low numbers then The Carphone Warehouse have improvements to make.
This will demonstrate whether or not their advertising and promotion schemes are being successful, if not then they need to find other ways to market their goods. If they are wasted time and money on promotion or advertising schemes that are not being successful their ability to achieve and objectives will fall. This is because they have less disposable finance to pay for other things if they are wasting it on promotion activities which are not helping the business.
This will show how much of The Carphone Warehouse’s advertisements sink in to the public. If they can remember it is beneficial to the business.
Depending on the results it will show the success or failure of The Carphone Warehouse’s after sales service. This may give them areas to improve upon. This will affect their ability to achieve their aims and objectives.
This will show what the respondent thinks of the product. The market researcher should follow this closed question with an open question to
seek why they have chosen the number they have.
This will allow the respondent to give their own view. This allows the market researcher to make more sense out of their rating and if it is low then they may have a direction to take to fix it.
This will allow The Carphone Warehouse to see if they can improve the prices of their contracts. If their competition is offering lower prices then customers will go elsewhere. If a lot of the respondents are with The Carphone Warehouse then they don’t need to improve it. This will affect their aims and objectives because it is a product they offer and if it isn’t doing well they need to improve it so they can meet their aims and objectives more efficiently.
This may what advertising and promotion campaigns are being successful and whether they can improve them. This will help them achieve their and objectives because they are gaining more information about their customers and it will be beneficial in future promotional campaigns. This will help them achieve more profit, gain a greater share of the market and increase customer base. All these are important due to the aging and decreasing population.
Analysis of Results
I have managed to collect data from 100 respondents. I have presented my questionnaire to the public and they have responded well, they have given me a lot of data to consider. I am not going to analyse the results of certain questions, which I choose to ask because they show the success of failure of the business. It will, hopefully show strengths and weaknesses and I will next write a SWOT analysis.
Market Share and competition
I asked the question: From the list of mobile phone retailers which would you say is the best? Orange, Vodaphone, The Carphone Warehouse, Argos, the Link, Woolworths, Tesco, Sainsbury, T-mobile. This question was aimed at finding out what The Carphone Warehouse’s main competition is. From the pie chart it is clear to see that The Carphone Warehouse’s main competition is Orange. This will affect The Carphone Warehouse’s aims and objectives greatly. If their main competition is beating them their aims and objectives will be increasingly important their success. The graph shows that the three leading mobile phone retailers are Orange, Vodaphone and The Carphone Warehouse. These three all specialise in mobile phone sales, whereas Tesco, Sainsbury and Woolworths all sell other products and mobile phones are not their main product. The main reason why these Retailers are not as popular as mobile phone retailers is because they do not specifically market their mobile phones, whereas The Carphone Warehouse does. The information given from this pie chart will be very useful to The Carphone Warehouse when they are pursuing their objective to grow their market share and increase their customer base. To increase these factors they will need to know about the market as it stands. This shows that they need to improve their market share, hence it being their objective.
As part of my questionnaire I asked the question: On a scale of 1 – 10, 1 being the lowest and 10 being the highest, what would you rate The Carphone warehouse’s quality of product? This question was designed to find out what people think of The Carphone Warehouse’s products. The graph shows the results of the questionnaire I carried out. 100 respondents all gave their rating of The Carphone Warehouse’s product quality. As the graph shows, the mode rating was 8 because it was the most popular answer. The medium is also 8. Although 8 is a high rating, The Carphone Warehouse should aim to have 10 as their average rating. To increase their product quality The Carphone Warehouse need to raise the standards of their products. To do this they need to produce good profit. One of their objectives is to increase standards of products, and to do this it is important that all other objectives are met in order to increase profit which will therefore give them enough disposable finance to increase product quality.
I asked the question: What is your main method of purchasing mobile phones related product: Online or Stores. This shows whether the internet market is more popular than face-to-face sales. It may also demonstrate the need to improve The Carphone Warehouse’s website. This will affect their ability to achieve their objectives because if there is a market which they aren’t taking advantage of then their profit will be lower and it will affect all there aims and objectives. 23% of The Carphone Warehouse’s revenue comes from online sales. The online market for mobile phones is 31% over 69% in-store markets. This leaves 8% of the market which The Carphone Warehouse are not reaching out to. One way which they could increase their online market is by improving their company website.
In my questionnaire I asked the question: On a scale of 1 – 10, 1 being the lowest and 10 being the highest, what would you rate The Carphone warehouse’s image. The mode average is 9, meaning it is the most popular response. The medium response was 8. Although these two numbers are high they can be improved upon. From the graph we can see that the ratings 1,2,3 and 4 are relatively row, but then takes a rapid increase on 5. This may show itself as a weakness in future investigation.
SWOT Analysis
Strengths and weaknesses are related to internal factors such as the product/service itself, Opportunities and threats are related to external factors such as the competition and actions taken by the competition. The aim is to compare the strengths and weaknesses of the business to the external factors that are putting pressure on the business to decide whether The Carphone Warehouse is successful.
Strengths
I will use the information I have collected in my questionnaire and the analysis of the questionnaire to establish the main strengths of The Carphone Warehouse. The strengths are internal.
- The Carphone Warehouse has become a recognisable High Street name.
In the questionnaire I carried out, everybody knew what The Carphone Warehouse is. This demonstrates that it has become a well known High Street name. This is due to marketing and promotion schemes being successful. For example, The Carphone Warehouse sponsoring Big Brother, a popular TV show. The results of my questionnaire showed that 83% of people first heard about The Carphone Warehouse on the TV.
- They give good quality products
From my questionnaire I established that The Carphone warehouse offer reasonably good quality products. This is a major strength because it gives the business a good imagine. They also offer good quality at competitive prices. This will encourage customers into the business which will fulfil their objective to increase market share and grow their customer base.
The Carphone Warehouse offer competitive prices on lots of mobile phones. They are well known for this. It is important to give good prices of products or the customer will go elsewhere and it will affect the image of the company.
The Carphone Warehouse has a relatively good imagine. This is a strength because it will encourage more people into the business which will help them achieve their aims and objectives.
- The Carphone Warehouse has a range of products that covers 90% of customer’s mobile needs
The Carphone Warehouse offers a wide range of mobile phone products and accessories which satisfy the needs of 90% of their customers. This is a strength because it means they are likely to increase their market share and recruit new customers through word of mouth advertising.
- The Carphone Warehouse has good market knowledge.
The Carphone Warehouse has good market knowledge which allows them to pursue greater promotion schemes which will lead to greater profit, greater customer base and greater market share.
- Very focused company objectives.
The fact that their objectives are focused using the SMART objective method, helps the business to unite and achieve their objectives. It allows The Carphone Warehouse staff to concentrate on meeting their objectives and it helps the business as a whole to focus.
- They have different product ranges.
If one product line is unsuccessful then it is not so important. They have spread their risk. Also, if the market for mobile phones goes down to people using the internet more then they wont suffer so greatly because one of their products is broadband access. So as demand for internet access goes up so will there profits, which may equal out the lack of mobile phone customers in the future.
Weaknesses
I will use the information I have collected in my questionnaire and the analysis of the questionnaire to establish the main strengths of The Carphone Warehouse. The weaknesses are internal.
- Limited Telecom Service Offerings
This means that there telecom services are limited which will also limit the amount of customers they have. If their customers are only able to buy a certain amount of products The Carphone Warehouse’s customer base will decrease. This will make it hard for them to achieve their objective to increase profit, grow market share, and maximise customer base.
- They are not the leaders in their market
As the questionnaire I carried out showed, The Carphone Warehouse are not market leaders. Orange appeared to have a greater share of the market.. This is a major weakness to the business in consideration to their objectives. Two of there objectives are to increase market share and encourage new customers into the business. This will be much more important for the businesses success if they are not their market leaders.
- They have not tapped into the whole internet market.
They do not command the greatest share of the internet market. This is because they have not branched out enough in this field. Although they have a website it may be improvable.
Opportunities
Opportunities are external positive effects on the business. There are many opportunities which may arise for the business. Some examples include:
- Changes in social patterns, population profiles, lifestyle changes, etc.
The Carphone Warehouse has the opportunity to open their market to a younger audience. More parents are allowing their children to have a mobile phone whilst at school supposedly for emergencies. This is a good opportunity for The Carphone Warehouse and they should ensure they take full advantage of the increasing market. This will help them to increase market share and customer base.
The UK has an aging population; this means there are more old people now in ratio to other age groups. The Sons and daughters of these 60+ citizens want to keep in constant contact with there parents as they are older and need attention. The children of this age group do this by getting their elderly parents mobile phones. The Carphone warehouse can close in on this growing market by selling cheap simple handsets. This will help The Carphone Warehouse to increase their customer base and market share.
- Advancing Mobile phone technology
Mobile phone technology has evolved rapidly. First they were only for talking on the phone, then texting, then MMS (multimedia messaging) and now 3G. 3G allows people to send more data to each other and allows people to network. The Carphone Warehouse can take advantage of this and phones with these advanced technologies and charge higher prices for these products. This will increase their profit which will help them achieve their aims and objectives.
Threats
Threats are external negative effects on the business. There are many treats to the business, some include:
The Carphone Warehouse are under threat of other businesses advancing above them and splintering their market share by taking customers away from them. This will affect their ability to achieve their aims and objectives because if they customer base goes down their profit will go down which will then affect all other aims and objectives.
If customers are putting pressure on The Carphone Warehouse to change, they will have to invest more profit into meeting their needs which may stop them from achieving other aims and objectives.
If demand for Mobile phones goes down they the market will shrink. This is a major threat because it will be hard to achieve good profit if demand for their products goes down. This will affect all their aims and objectives.
