Marketing Research. Explain how different marketing research methods have been used to make a marketing decision

Authors Avatar

BTEC National Unit 10 Marketing Research In Business Gemma Parnell

This assignment will cover the following:

Pass criteria

  • Describe types of market research
  • Explain how different marketing research methods have been used to make a marketing decision
  • Plan marketing research for a selected product/service using appropriate data collection
  • Conduct primary and secondary research for a selected product/service making use of identifiable sampling techniques
  • Interpret findings from research presenting them clearly in an appropriate format

Merit criteria

  • Explain with examples, how different market research methods are appropriate to assist different marketing situations
  • Explain the reasons for choosing the particular method of data collection for a selected product/service
  • Analyse own research and findings and make recommendations on how marketing strategies could be adapted or implemented

Distinction criteria

  • Evaluate the market research method used by a selected organisation
  • Evaluate the findings from the research undertaken

P1 Describe types of market research

Scenario

‘A simple definition of market research that is easy to remember is: ‘keeping those who provide goods and services in touch with the requirements of those who buy them.’

There many types of marketing research techniques, primary, secondary. Primary research involves getting original data directly about the product and market. Primary research data is data that did not exist before. It is designed to answer specific questions of interest to the business 

Primary sources enable the researcher to get as close as possible to what actually happened and is hands on. Primary methods include observation, interviews, and using pilot studies.

Observation watches the behaviour first hand instead of asking someone what they might do in a situation. Observation is more accurate then asking people, because people do not always know what they would do or they may not answer honestly. Observation can be watching people in a shop; this can help provide information on the best layout and displays. It shows where people look, and how long they spend in particular aisles.

Interviews are sometimes held over the telephone, postal, online, or face to face. Members of the public are sometimes asked to take part in surveys and feedback can be asked when you visit a website or ring a business, for example when you ring the bank.

A pilot study is when a small change or a new product is bought into one area of the business to see what happens. For example Tesco’s sometimes introduce a new product into just 1 or 2 stores to see how well it sells.

Secondary research uses data that has been published on previous studies. This is a much cheaper method but isn’t always relevant or up to date.

Secondary research can be obtained by looking into databases where records have been kept about customers; this can give them information about existing customers, where they live and what they purchase. EPOS (electronic point of sale) when products are sold the barcode is scanned. The barcode can tell a lot of information about stock coming into a business and when it is sold. It can show if certain products sell better at certain times of the day, week or year, what quantity they are sold in and note any change in the level of sales.

Websites are also monitored via cookies. A cookie is a small piece of computer code that records a user’s details and the next time you use the browser the web server will recognise that you have already visited the website before.

This information can tell the owner who has visited, what pages were requested and how long they browsed for.

Savvy business owners will do secondary research first then conduct primary research. For example the owner of a video-rental shop would want to find out about as much as they can about an area before opening a new store there. Using information from secondary sources, the owner can learn about all kinds of demographical data including detailed income data and spending patterns. Using this information and information about competitors the owner could then send out a questionnaire to a sampling of households to find out what kind of movies people like to watch. The primary research will help when deciding what to stock.

Qualitative research involves getting people’s opinions and views.  Most qualitative data arises from detailed interviews with a respondent or through focus group discussion. The people involved in taking part in such interviews are usually carefully picked so that you are getting the information from the target audience. Qualitative research can help identify problems, for example there may be people who do not feel there should be another nightclub in the area because of the noise and anti-social behaviour, and this means the people who want to open a nightclub can find ways to overcome the problems before they present to the local council.

Quantitative research produces numbers. It uses information to produce statistics. For example, they may ask members of the public what they think about the opening of a new nightclub. 35% may think it’s a great idea, 15% are worried about the noise, 35% may have no opinion and 15% may have another opinion on the matter. This information can be very helpful in determining if their service will sell, and how many people may oppose the idea.

PESTLE Analysis

The PEST or PESTLE analysis is a tool that can be used to help businesses with their marketing strategy. It can help them to see the problems they may face which can help them to overcome the problem.

Political

- Current and future taxation policy
- The current and future political support
- Grants, funding and initiatives
- Trade bodies
- Effect of wars or worsening relations with particular countries

Economic

- Overall economic situation
- Strength of consumer spending
- Current and future levels of government spending
- Ease of access to loans
- Current and future level of interest rates, inflation and unemployment
- Specific taxation policies and trends
- Exchange rates

Social

- Demographics
- Lifestyle patterns and changes
- Attitudes towards issues such as education, corporate responsibility and the        environment
- Social mobility
- Media views and perceptions
- Ethnic and religious differences

Technological

- Relevant current and future technology innovations
- The level of research funding
- The ways in which consumers make purchases
- Intellectual property rights and copyright infringements
- Global communication technological advances

Legal

- Legislation in areas such as employment, competition and health & safety
- Future legislation changes
- Changes in European law
- Trading policies
- Regulatory bodies

Environmental

- The level of pollution created by the product or service
- Recycling considerations
- Attitudes to the environment from the government, media and consumers
- Current and future environmental legislative changes

P2 Explain how different marketing research methods have been used to make a marketing decision

First direct launched in 1989 and they are part of HSBC. First Direct offered a completely new type of business, where customers were able to access the services by telephone. This meant customers had more freedom because they could access the services day, night and weekends. Later they extended to internet banking and text messaging. First Direct received bad press when they tried to impose charges on certain customers. This bad publicity had an effect on business.

They started to do Market Research. They used primary and secondary research. Primary research is new information they gather which is specific to their needs, and not available to their competitors. Secondary research uses already published data. This method is cheaper and quicker but it’s available to others, not specific and sometimes can be out of date.

The Market research showed that new and existing customers had a different perception of First Direct. Existing customers were loyal and satisfied. New customers were more likely to change banks.

This market research enabled First direct to re-launch. From market research they knew that customers wanted prices to be transparent, they offered 0% interest charges on overdrafts up to £250 and gave customers text alerts when they were nearing their limit. They developed products to suit the customer’s. First Direct provides high levels of customer service. It puts existing customers first to maintain these high standards. As a telephone and online bank it could come across as faceless. By listening to customers and paying attention to all aspects of service and communication, it has built up a loyal customer base with a unique position in the banking industry. 

The findings from market research can help a company to see what they can do to make their customers happy and more likely to buy their products and services. First direct were able to make changes that their customers wanted and to see what would attract new customers, the changes they made helped to increase their turnover and profit.

P3 Plan marketing research for a selected product/service using appropriate data collection

Research Brief

The research brief would be set out in broad terms for the market research team. My team will conduct market research on different car companies, demand for cars in the county of Bedfordshire and demand for a certain style and performance of a car. It will set out the type of project for which the research is required and provide details of the organisation. It will have details on what is required to find out, for example how are customers likely to respond to this new business in the area. Our research brief is to find out if there is a demand to open a new car company, selling accessories and features for cars in Bedfordshire. We have decided to conduct our own market research rather than hiring an agency as its too expensive and time consuming.

Our company will distribute cars and features to cars. We will offer new and second hand cars with different, but affordable price ranges.

Defining the issue

The market research team then need to clarify what needs to be researched. They need to be clear about the extent of the required research project and what exactly the client wants you to find out. It is important to be clear about the target population that the research is aimed at. For example, in researching the market for new cars, who will the target population consist of?

Our issue will be seeing whether if there is a market in the Bedfordshire for a new car firm and whether there is enough demand to support our business. We have decided that our target audience is going to be males aged between 19-45 and females aged between19-30.

We will look at different factors in determining the type of people who would use this service. The areas we will look into will include occupational areas, social trends, location, demographics, and income. These factors will help show us who the customers will be and where we will advertise to them, places they are most likely to visit or newspapers they are most likely to read.

Setting Objectives

Objectives need to be established from the start of the project to ensure that they have been achieved at the end. Progress checks should also regularly been made.

Our five objectives from conducting this research are to:

  • Look at car companies, features they sell and which ones are the most popular
  • To identify who makes up the market  for car features (both interior & exterior)
  • To find out if there is a market for car accessories & appropriate location for this car firm
  • Create a survey, ask students what features they would want and the amount they would pay

Research stages

There are three stages involved in the research:

  • Brief-What are you plan on doing?
  • Objectives-what you want to achieve and how?
  • Plan-what methods are you going to conduct to gather the information you want?

Write a research proposal plan of work

The plan will decide what methods to use to collect data, for example will they be doing face to face surveys, online questionnaires or retrieving secondary data? They also need to assign this task to different members and set time limits on when the data needs to be collected by.

They also need to decide who will create the surveys, focus group research and the other types of research they are conducting. They need to analyse the results of the research and decide when this needs to be completed. The data then needs to be presented to the clients. They also need to decide who the research will be carried out on. For example people between the ages of 18 and 45 who live in the local area.

We need to conduct research that finds out if there is a demand, who the competition is, who the target market is and what problems they might face in opening the business.  

I think that conducting face to face interviews in the town centre and at the local colleges and university would be a good method as you can find the type of people you need to ask who are likely to live in the area. It is important that although they try to interview many people they feel are likely to use the business that they also interview a wide range of people to spot potential problems that may occur, for example noise pollution. The type of people who are the target market are people aged between 18 and 45 who live in the local area. Many students at the colleges and university would fit into this group.

They could also conduct postal questionnaires by handing them out to people in the colleges and universities and ask them to post them back. They could use the data collected from the students such as name and addresses to inform them of offers and promotions.

Our plan of work that will be set out:

  • Approaches for collection of data-Our approach will be using primary research such as face to face interviews, surveys, chain e-mail, observation & experimentation. Secondary research we will conduct includes internet, libraries, company reports and social trends. Within the questionnaire, we will include qualitative and quantitative question in order to get an overview of the overall performance and numerical data for percentage of population that want features. Another method we will use is E-transactions, this is where sites such as Amazon can show which products were most popular with the public and most purchased. This will give us an indication of which product features for car are most likely to sell.
Join now!

  • Who is responsible for collecting it?-There are two options which is the company conducts the research itself/commission others to do it or they would hire agency to do the research. My team will conduct this research by us as it is too expensive to hire an agency to do so. In addition, it is more time consuming to hire an agency whereas it can be done within a shorter time period if it’s done by yourself or with other team members and is much cheaper. We also have the knowledge to conduct this market research independently.

...

This is a preview of the whole essay