- 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.
- The time limit of data to be collected-We have decided to spend an approximate time period of one week to gather the data and information we need in order to inform our decision. The starting and ending date for the collection of this data is shown below.
Forecasting
A forecast is an estimate of likely results based on the information that you already have. The more detailed, the more likely information/data is going to predict accurate predictions of what the research will show.
Collection of data
Companies should consider the type of data to be collected? For example, will it be internal or external? Will it be primary or secondary?
When carrying out market research, the research team has to consider how useful the data will be? For example, Primary research is likely to be accurate research as it’s the latest information about services/products whereas secondary research is only information already done by others which means the source can be quite old and information is likely to result to inaccurate information.
We have collected our data by conducting primary research. The main importance of this is to ensure accurate information is collected otherwise we could be making a risky decision. The latest information from present demand ensures we understand what the market requires and what products and prices appeal most to them. Collecting is a collection of collective data so by collecting data I’m able to collect the collective information required to collect certain data and collect into a conclusion to this collective appendix which has been finally collected. If a business understand their market, they are able to perform effectively and successful when launching a particular service or product which ensures a spectacular result.
P4 Conduct primary and secondary research for a selected product/service making use of identifiable sampling techniques
When conducting market research you need to consider the size and choice of the sample that you want to research. You could take a census which involves researching everybody in a particular population. A census tends to be used when the population size is very small, otherwise it can be very timely and expensive. If you do not want to take a census you can take a sample. This involves questioning a selection of respondents from the target market. In order to ensure that the results of a sample are accurate the market research process must identify a representative cross selection of customers. This means to choose a small number of people from each group, for example these groups could be based on age, gender, employment or location. Depending on the type of data that needs to be obtained it may be useful to choose a sample. For example you may wish to target people who own a car, or people who shop in Tesco’s.
Probability Sampling
Probability means the relative frequency of occurrence in a long series of trials of the event of interest. For example, if a new car air freshener has been thoroughly tested and it is found that six out of ten people like it, then I is likely that if an addition person is interviewed the probability is six out of ten that this person will like it and six out of ten people in the total UK population will like the new toll (provided the sampling has been done correctly)
Random Sampling
This is when people are picked at random to take part in the research. It may be that a sample has already been chosen, for example everyone who owns a car and then people are picked at random from this group. We used this method when we choose people to take part in the survey.
Systematic Random Sampling
This method is similar to the above but it would take a list of people, for example households living in a particular town, then you would select everyone at a set number on the list, for example every tenth person listed.
Stratified Sampling
Stratified sampling ensures that different groups are properly represented and allows the random selection of items within each group. For example if you wanted a selection of male and females in different age groups, everyone may be put into groups, for example females aged 18-25, males aged 18-25, females aged 26-30, males aged 26-30, etc. People are then randomly chosen from each group.
Multi-Stage Sampling
This involves a number of stages in selecting a sample and is used to reduce the time and cost of research while at the same time keeping a random approach. This type of process could be used for sampling across the UK, for example taking a sample of geographical locations within the UK and then households within these geographical locations.
Cluster Sampling
Cluster sampling involves taking a small group of people who have a similar behaviour to that of the population. For example they may choose people who have similar purchasing patterns for washing powder, then these people can be surveyed and it should have a representation of how the population purchase washing powder. Cluster sampling can be done quickly and this saves money, but it must be important to pick clusters that have similar characteristics to the total population.
Non-Probability sampling
Probability sampling produces good results but can be timely and costly; it involves a lot of planning and can take time to carry out the research. Here are some other methods that do not use probability.
Quota Sampling
Quota sampling involves dividing the population into groups by age, sex, income, etc. the interviewer is told how many people to interview but is not told how to locate the respondents. This approach is often used in shopping centres. It is quick and uncomplicated. This method is not random though because the interviewer is only interviewing people that are at the shopping centre it excludes people who do not shop there, and the interviewer may choose people who appear more co-operative and appear to have time to spare.
Judgement Sampling
The researcher chooses participants based on who he thinks it’s likely to represent the views of the target population. This method can be good when the researcher is skilled and experienced.
Convenience Sampling
This method is not as reliable because it involves interviewing the people that are most convenient to sample, for example people in walking down the high street. It may involve interviewing a lot of people who do not meet the target population.
Observation
Observation involves watching people and recording their behaviour. This is very useful for supermarkets and can give them a lot of information. For example what aisles do they miss, where on the shelf do they look, how long they spend in particular aisles etc. It enables the observer to see how they person actually behaves and not what they say they do.
Focus Groups
A group is asked to discuss issues related to products or services, or other activities such as customer service or advertising. A lot of information can be taken from these groups and they are often recorded. Many people who take part in focus groups are often people that have more time available, as opposed to a lot of the population who do not have time to take part.
-
Are you male or female?
Male Female
-
What are age you?
19-24 25-30 31-35 36-40
- Do you own a car?
Yes No
- What car do you drive?
-
How often do you use your car?
Everyday once a week couple times a week not very often Never
- Have you got any accessories or would like any attached to your car please give us more details about the types of accessories you have and would like?
- How much would you pay to modify your car with your suggestions above?
- How often do you purchase accessories for your car?
Once a week Every couple of weeks Once a month Once a year
-
Do you fit your accessories yourself or get a professional to fit them?
Yourself Professional
-
How far would you travel to a garage?
1-5 Miles 6-10 Miles 11-15 Miles 16-20 Miles 20+ Miles
The cost and accuracy of different sampling techniques
Questionnaires
Questionnaires are a list of set questions that are used in market research; they can include postal questionnaires, face-to-face interviews, phone interviews and other means. Questionnaires need to be clear and precise. There should be factual questions which include name, age, gender, location etc. There should also be questions that ask for views and opinions, for example what do you think about the quality of the products sold at..? Questions should be clear to avoid confusion, influence and misunderstandings. The questions should be easy, and not misleading, if there are lots of questions, they rely upon the memory of respondents especially to events that happened many years ago, or ask intimate questions many people may not want to respond and it is useful to have a high response rate. Having a low response rate means that time and money has been wasted and there may not be enough information needed for the market research.
Questionnaires usually involve sequencing the questions in a logical order. For example questionnaires usually start off asking the respondents name, age, gender etc. simple questions like do you shop at Tesco’s are then asked, then it moves on to more detailed questions about how you feel about the service, products, competitors etc. A common question in many surveys may involve asking about something different from the information they are trying to gather. For example a questionnaire about supermarkets may ask you to tick all the magazines or TV programmes you watch, and ask how often you read or watch them. This type of information can help the market researchers to see where they can best advertise to their target market.
Dichotomous Questions
These involve questions that have a choice of answers and your answer determines which question the respondent should move onto next, to avoid those answering questions that are not relevant to them. For example, question 6, do you shop at Tesco’s? Yes or no, if you answer is no please proceed to question 15.
Multiple Choice Questions
This is where the respondent has a choice of answers to choose from, they may be questions like please tick all the following supermarkets you use regularly, Tesco, Waitrose, Morrison’s, Asda or Sainsbury’s. They may involve asking the respondent to only pick one answer for example where do you do most of your shopping? (Please tick one) Tesco, Waitrose, Morrison’s, Asda or Sainsbury’s.
Scaled Questions
These questions will give a choice of answers on a scale, for example how do you feel about the new Tesco store opening in the town centre? 1 – Do not wish for it to open, 2 – prefer it not to open 3 – don’t mind either way 4 – would like it to open 5- really want it to open.
Open-Ended Questions
These questions give the respondent a chance to add more information and give their views and opinions. It may be questions like how do you think the service can improve? Many respondents may want to add more information and feel that they are not able to provide all their views when a questionnaire only has closed ended questions.
Bias
Bias is a distortion of results caused by the way in which they are collected. This could be by asking questions like ‘many people think that Tesco’s is the best supermarket, do you agree?’ It could also be from poor sampling for example only asking people in a shopping centre, using the wrong sampling units or by a lack of response from some groups of people.
Pilot
It may be very useful for the market research team to conduct a pilot research programme. This would involve asking a small number of people to complete the survey to assess how easy the questionnaire was to complete, how long it took and to see if there are any issues with the questionnaires.
Surveys
A questionnaire is a structured set of questions that can be given to a number of people. A survey is a research tool that is used to find out the general view of a large number of people on a particular topic. If you were going to do a survey into the mobile phone use of 16-21 year olds you could ask questions like, what types of phones do you use? Where did you buy your phone? How do you pay for your phone? Etc.
For our car accessory company we used questionnaires that mainly had closed ended questions and a choice of answers. We used random sampling to decide who to ask and we had used scaled questions and multiple choice questions. We do have some open ended questions and have given respondents a chance to give us more information.
Face-to-face interviews-Primary research
IEE=Interviewee
IER=Interviewer
- Female client aged 25
IER-Hello
IEE-Good afternoon
IER-Thank you for giving us your time to answer some questions for our survey
IEE-No problem
IER-Do you own a car?
IEE-Yes I do, I have a corsa.
IER-Do you have any accessories for your car? If so, how often do you purchase accessories?
IEE-Seasonally, I purchase an air freshener for my car and I have my car painted with a different pattern every year. For example, my car has a flower on fire as my design for this year.
IER-How much do you spend for purchasing accessories for your car?
IEE-I spend 300/400 pounds a year.
IER-What age range do you think purchase exterior and interior accessories for their cars?
IEE=In my opinion, younger adults are more likely to purchase interior and exterior goods whereas older folks concerned with comfort rather than purchasing additional accessories. I would say the age range for both interior and exterior accessories would be for people aged 17-30. I think women are more likely to purchase interior goods whereas men are more likely to purchase exterior goods like paint work, rimps and other accessories. It depends on who you are targeting. One of my friends has a child aged 5 who owns a Mercedes. She purchased a portable DVD player and TV screen which is attachable on the head rest that keeps her child occupied while in the car.
IER-What is currently the most popular car accessory in your opinion?
IEE-Stereo player, sound system, speakers, anything involving music is probably the most demanded products for a car. I have my own CD player installed and I consider it to be a necessity when purchasing a car, or purchasing accessories for a car.
IER-Do you get car accessories fitted professionally or done yourself?
IEE-That depends on the accessory. For instance, if I want to install a new CD player and surround sound system, I would most likely get fitted professionally because I can’t afford to repair for any error which I may cause if I had done the job myself, and it’s not a risk I’m willing to take. However, if the accessory were an air freshener or a tom-tom, I would fit it myself.
IER-Thank you for your time, you have be very informative and helpful.
IEE-I’m glad it helped, bye.
- Female client aged 19
IER- Thank you for giving us your time to answer some questions for our survey
IEE-That’s okay
IER-Do you own a car?
IEE-No I don’t, but my boyfriend owns a car
IER-If you did own a car, or using your boyfriend’s car as an example, would you or does he purchase any accessories for it?
IEE-My boyfriend has rims on his wheels, tinted windows and paint work. For my car, I would probably buy a stereo and speakers for about 100/200 pounds.
IER-How often do you purchase accessories?
IEE-Not very often, depends on the season. I would probably change my patterns in summer whereas during winter, I wouldn’t bother with paint work due to terrible weather and hardly anybody is likely to see it in the winter because of snow.
IER-Would you get accessories fitted by yourself or professionally?
IEE-that depends on the price of getting something fitted. If it was something important then I’d it fitted but if it’s something I can manage to do myself, then I’ll just do it.
IER-How far would you travel if you were to get an accessory fitted?
IEE-Not very far, I would travel to the closest garage rather than paying a fortune to go to a top-end garage where the end result is likely to be the same.
IER-Do you think that young adults are more likely to purchase car accessories than older people?
IEE=Young adults probably want to purchase more accessories, but can’t afford it so they are restricted. Young adults are just starting their lives and only have enough money for just getting by. Older people have money to spend, but they won’t waste it on car accessories, not unless it’s a birthday present or for a special occasion.
IER-Thank you for your time
- Male client aged 17
IER-Thank you for giving us your time to answer some questions for our survey
IEE-No problem
IER-Do you drive a car?
IEE-Yes I drive a Vauxhall Astra
IER-How often do you drive your car?
IEE-Everyday
IER-Do you have any accessories for your car? If so, how often do you purchase accessories?
IEE-I have tinted windows and larger exhaust. I would purchase something to kit up my car every couple of months like new polishing and cleaning equipment, bigger rims and possibly new sound system.
IER-How much do you spend on your car accessories?
IEE-I spend about 1500 pounds
IER-Would you fit them yourself or professionally?
IEE-I fit everything myself. I struggled at first to fit my rimps, but I got the hang of it and I had some mates show me how to do it. It costs a lot to get anything done professionally so I do it myself.
IER-What other accessories would you like to buy for your car?
IEE-A spoiler
IER-Do you like making your car look good on the outside alone, or both in and out?
IEE-I want my car to be comfortable and smooth inside so leather sits and CD & speaker player is a must have for my car. I probably spend more time and money on making the outside look at its best though.
IER-Do you think that your car is big part of your life?
IEE-Yes because it’s what I like, my friends like and something we like showing to each other in our spare time. This is my hobby as it is probably every other man’s.
IER-In your opinion, what do you think the age range is for buying accessories for cars?
IEE-I think the younger you are, the more you want to buy and own a car. I don’t think older people are interested in cars or accessories, its only comfort and getting to places that makes a car of use to them.
IER=Thank you for your time, bye
- Male client aged 27
IER-Thank you for giving us your time to answer some questions for our survey
IEE-Sure, no problem
IER-Do you own a car?
IEE-Yes I do, I own a Corsa
IER-How often do you drive?
IEE-Everyday to get to work and back home
IER-Do you have any accessories for your car? If so, how often do you purchase accessories?
IEE-I mainly purchase exterior accessories on a yearly basis. Presently, I have new rims, spoiler, exhaust, angel eyes (lights in the shape of eyes) and windows tinted. I don’t really have any interior accessories other than dice. Seasons play a large part on what accessories I purchase. For example, during the winter I will purchase a scrapper, de-iced spray and special winter tyres.
IER-How much do you spend on your car accessories?
IEE-I spend around 1500/2000 on my car every year.
IER-Do you get accessories fitted yourself or professionally?
IEE-I fit all my accessories by myself. It costs a lot to get accessories fitted by professionals. However, if I was fitting something which could mess up my car if fitted wrongly, then I wouldn’t take the risk and I’d have it professionally fitted at the nearest garage. I know how to fit most car accessories myself though.
IER- What other accessories would you like to buy for your car?
IEE-I would probably purchase an advanced CD player. I’m quite keen on getting a design pattern for my car, but then again it does look girlish to get patterns so I might just stick to paint work.
IER-In your opinion, what do you think the age-range is to purchase car accessories?
IEE-I think that young adults who have just settled in their careers, which are aged 20-35, are most likely to purchase car accessories as that’s the age people want and have money to spend on their cars. Older people are less likely to spend money on cars, they probably just want a vehicle that can take them to places and is comfortable.
IER-Thank you for your time, it was very helpful.
- Female client aged 18
IER- Hello, thank you for giving us your time to answer some questions for our survey
IEE-No problem
IER-Do you own a car?
IEE-Yes I do, I have a Vauxhall Astra
IER-How often do you drive your car?
IEE-Every single day
IER- Do you have any accessories for your car? If so, how often do you purchase accessories?
IEE-Yes, I have fluffy dice and that’s it. I sometimes purchase air fresheners. I don’t really do much to my car in or out. I just purchase some car accessories during seasons, but I don’t spend that much on my car.
IER-How much do you spend on your car accessories?
IEE-I spend around £50 a year.
IER-Are there any other car accessories you would like to purchase?
IEE-I would to get a new CD player as my one plays up some times.
IER-Do you fit car accessories by yourself or get a professional to do it for you?
IEE-I would fit it myself if it’s something small, however if the car accessory is something as important as a CD player installed in my car, then I’d get it done professionally.
IER-How far would you travel in order to get a car accessory fitted?
IEE-I wouldn’t travel more than 20 miles, I would only travel to a garage I know which offer a great service and complete the job.
IER-Thank you for your time, you have been very helpful to our findings.
IEE-that’s okay, bye.
P5 Interpret findings from research presenting them clearly in an appropriate format
After the research has been carried out and the information has been generated the results then need to be interpreted and your results need to be presented. The results need to be presented in a clear manner so that it is easily understandably and shows what should be done in view of the results.
Surveys seek to find out the views and behaviour of typical buyers and therefore it is important to be present a picture of the average person or group. This can be presented by calculating averages; this involves showing the mean, median and mode.
The arithmetic mean is the most commonly used way of calculating an average. For example if we looked at our secondary research we could find the average prices of items sold by our competitors by adding up the cost of each item and dividing it by the number of items. This would give us an average price. We could also look at our primary research and using the information given to us about the distance people are prepared to travel for these products we could find out how far on average people are prepared to travel.
Savvy business owners will do secondary research first then conduct primary research. For example we could look into information about our competitors, how they advertise and their prices. Using information from secondary sources we could learn about all kinds of demographic data including income data and spending patterns. All this information can help them when they are advertising or opening a new store. The information we could gather by doing secondary research could help us to work out what information we need to gain from our primary research.
The median is a second way of calculating an average. It simply takes all the data in numerical order and is the middle value. For example, this is a list of 5 people we interviewed and how far each of them was willing to travel (graph1). 5,5,7,8,8. The median would be 7miles. When using this method it prevents the results from being distorted by an unusual answer. For example, the data from collected about finding out how far people are willing to travel, if 1 person was willing to travel 100miles this would mean that the average is dramatically increased and this may not give a correct representative from the whole group.
The mode is the third way of calculating an average, this method sets out to find the most common figure. For example if the mode for our data of distances that customers are willing to travel to for our product, was 15 this would mean that most people are willing to travel 15 miles.
To work out the mean, we can’t take ranges as given in the questions so instead we take the midrange point. While the ranges are non-continuous in the example (i.e. they do not say 0-5, 5-10 etc. But 1-5 and then 6-10) we can still multiply this mid point by the frequency of responses. So 8 x 3 where 3 people picked 6-10 whose mid point is 8 equals 24. This gives us a total mileage people are prepared to travel of 123 miles. As there were 14 respondents, 123/15 is 8.8 miles.
The range is often important as it helps to the dispersion of sets of figures, are the figures clustered around the average or are they widely dispersed? If there is a wide disperse then it shows there is a considerable difference between the answers, when using the range this can also help to understand the mean results. For example if one person was willing to travel 100 miles for the product but most people were only willing to travel 15 showing the range of answers can help to identify why the average has been affected.
In our results for the distance that customers were willing to travel our range was from (0) no travel, to 20 miles.
From the graph (graph2) showing how often people purchase car accessories you can see that the mode, the most common answer is once a month and once a year. There was 1 respondent that answered once a week and one that answered once a fortnight. 2 people said never. To work out the mean I have worked out how many purchases people make a year depending on their answers, for example someone who buys a car accessory once a week will on average make 52 purchases a year. I have added the total number of purchases together and divided them by the number of respondents to find out on average how many purchases people will make a year. The answer is 10.2 purchases a year. Based on the 14 people we asked this equates to 142 purchases a year. The range was between never and once a week.
We also noticed in our research that is there was more women buying car accessories than there were men, which surprised us as we had assumed men would be more interested in buying car accessories. This showed us that it would be a good idea to have a range of products that are aimed at women.
Market research helps us to understand our customers and potential customers. We learn about how they shop, where they shop, how much they can afford to spend and what is important to them when deciding to make a purchase. When a business understands their market, they are able to perform effectively and efficiently when launching a new service or product which increases the chances of success. The results from our research has given us information that will help us decide what to stock, when, where, why, and how.
For our secondary research, we gathered information from the internet on present competitors to see their prices, products and how we could differ for them. Our competitors are Halfords and Mileshams in Dunstable. We looked at different prices and accessories offered in Halfords, and we have already spotted something the market is very keen on which hasn’t been picked up by companies, which is offering a tinted window service and other many other products.
Halfords would be one of our biggest competitors with 469 stores in the UK and Ireland. They sell a wide range of products in different categories including car maintenance (car parts, oil, workshop tools and body repair equipment) car enhancement (in-car entertainment systems, cleaning products, accessories, satellite navigation systems, and alloy wheels) and leisure items (bikes and bike accessories, child car seats, roof boxes, and other outdoor leisure items). They offer fitting and repair services so it is vital that we can offer a similar range of products and services in order to compete with them.
There are 1 other car accessory companies in the local area of Dunstable and another 2 but one of them only deals with Volkswagens and the other one Honda’s. Mileshams Discount Car Care in Dunstable offer a wide range of products and have a good website where you can order a few selected products online and they also have catalogues available. I have chosen one product that is being sold at both Mileshams and Halfords to compare the prices. Armor All Clean and Shine Car Wipes (pack of 5) are sold at £3.29 at Halfords and sold for £2.99 at Mileshams.
It would also be very useful to look at the population of the local area and how many people are car owners and try to find information from national statistics to see how big the potential market is.
Distances People are prepared to travel:
Mean: 8.2 miles, this is the arithmetic average distance people would be prepared to travel
Mode: the most common answer was 11-15 miles
Median: 11-15 miles, this is the distance that was in the middle
Of those that would travel, over 81% would travel 11-15 miles.
Range: The range was between 0 miles and 20+ miles
With the mean being far lower than both the mode and the median, it is clear the effect outliers have on the results. Removing the one result in the 20+ miles option reduces our median to in between 6-10 and 11-15 and so I would advise locating in the upper end of 6-10 miles which also fits in with the mean result better.
How many purchases people make:
Mean: 10.2 purchases a year per person
Mode: the most common answer was once a month and one a year.
Median: once a month
Range: the range was between never and once a week
M1 Explain with examples, how different market research methods are appropriate to assist different marketing situations
Questionnaires can be compiled relatively quickly and can be inexpensive, compared to other primary research methods. They are a set of questions designed to help find out as much information as possible. Many people will not always complete the questionnaires so to increase the response rate it is important to ask easy questions that are clear and concise, and to ensure the questionnaire is not too long. Many companies offer rewards for completion of questionnaires, many websites offer people points for completing surveys which can be converted into cash or prizes when enough points have been earned. Many surveys simply offer entry into a competition to win a prize. Questionnaires can help a company to determine the target market, to find out if there is a need for the product or service and to help gain insight into people’s opinions regarding particular products or services. Questionnaires may not always give accurate results of the whole population as they are limited by the people who respond. For example many companies ask people to complete surveys in town centres and shopping centres, this means anyone who does not go to these places are instantly excluded, and many people may not have the time to complete these surveys, they are also excluded. A supermarket that wants to carry out research to find out how they can improve the store may find it useful to ask people going into the store to complete a survey. This can be useful to find out what their customers want but it is only asking people who currently shop there. But since many people shop in more than one supermarket and the company want to find out how to improve the store for its existing customers this would be quite a good method. Online and postal votes do not give the respondent much room to add opinions in and they will only be able to answer the questions, this can be useful when there are a large number of people being interviewed. Face to face and telephone surveys can mean that respondents are able to give better detailed answers and opinions. The information they gain from this can be useful and if the level of response is fairly low it means they have the time to look at this extra information.
Focus groups are an important tool for acquiring feedback regarding new products, as well as various topics. In particular, focus groups allow companies wishing to develop, package, name, or test market a new product, to discuss, view, and/or test the new product before it is made available to the public. This can provide invaluable information about the potential market acceptance of the product.
Focus group‘s are conducted by a trained moderator among a small group of respondents. The interview is conducted in an unstructured and natural way where respondents are free to give views from any aspect. Focus groups use a small number of people usually up to 15 people but may be carried out a few times. Because focus groups are small participants are often picked out depending on their education, work, or gender etc.
Observation can be a very good method of finding out peoples shopping habits. It gives accurate results on how people actually behave in certain situations as apposed to how they say they behave. It is used a lot by supermarkets and can give them valuable information on how they shop, for example which aisles they go down, do they look at the special offers, what areas of the shop do they spend longer in and how quickly they shop. This can help shops plan how they layout stores and where they put certain products and special promotions. Using this method many supermarkets realised that people tend to mainly look at the products at eye level, this means they have put items that create more profit at eye level on shelves, and items that are higher up or lower down are more likely to be own brand products and value products.
Pilot studies, experimentation and field studies are often useful in market research; there are many different ways this can be done. For example new products may be put in one or two stores to see how well it sells in those stores before they buy stock for every store. Companies may give free samples to consumers in return for feedback before launching the product. For example they may give 200 new mothers a sample of nappies to see what they think of the product.
There is also a wealth of secondary research that companies can use to help them with their market research. Internally companies can look at their databases, EPOS (electronic point of sales) website monitoring and other records. The information they get from their previous sales and statics can help them to spot patterns, spotting these patterns can help them prepare. For example a company may look at the different selling patterns in the past to work out when they are busier, this could show they have days of the week they sell more and even seasons in the year, this could show that certain months of the year, seasons or holidays are busier. They can then use this information to ensure they are ready for the busier periods, more stock, staff and advertising for example. These records can also show how successful different marketing campaigns have been. Companies can experiment by making small changes in certain areas of their business and seeing how it affects their business; if it improves their business they can make these changes throughout the whole company.
Government statistics can be helpful for companies, a car accessory company may be able to use statistics to find out how many car owners there are nationally and locally and this can help them to determine the potential market size.
M2 Explain the reasons for choosing the particular method of data collection for a selected product/service
There are many different reasons for choosing different methods of market research. They need to be suitable for what information you need. If your service is local you may find it more appropriate to use methods such as conducting face to face surveys in the local area to get answers from the people that would be likely to use the service. A service or product that may be sold nationally would need to find information on a wider scale and using methods such as telephone and online surveys may be more appropriate.
The cost of conducting the research may be an important factor in deciding which methods to use. Some of these methods can be very expensive and many start-up companies may not be able to afford to use all the methods they would like to. More expensive market research may provide better more accurate information so many big companies may find that it is worth spending extra money on market research to get the right information they need.
Questionnaires can be quick to construct, complete and analyse and may be a good method if you need to have the information relatively quickly. Some methods may take more time to get the results.
The accuracy of different methods also varies and this needs to be considered when deciding what type of market research is used. Results should represent the opinions of the whole market you are researching, the market may include everyone in the country or it may include a more targeted market.
The response rate of different methods also needs to be considered, what methods have better response rates and what type of people respond to different methods.
Observation is usual for recording what actually happens and can be expensive to set up, observing can be filmed which can be useful in making detailed notes about what is observed. The information can be very relevant and valid when used in the right way. The response rate is high because you do not need to gain permission from participants, but you will probably need to get permission from somebody in charge of the setting. This method is very useful in shops and as the owner of the shop you do not need to get permission from anyone.
Conducting experiments in market research can be useful for changing the variables in the marketing mix. It can be very time consuming as the experiment has to be set up and then monitoring to record the results, this can make it expensive. If the experiment is set up well it can be very accurate and valid. Experiments may last a long time or they could be relatively short experiments.
Surveys can provide a lot of data and they can be used to get data from a very large sample. They can be relatively quick to create but can be timely to receive the responses and analyse the data. Face to face interviews can be quicker but it would be harder to get information from a large number of people. The validity and accuracy depends on how well the questionnaire has been structured. Postal surveys have very low response, online surveys are quite quick to get responses from, face to face interviews can often exclude a lot of people and many people do not like phone interviews because they often seen as obtrusive and annoying, this lowers the response rate and many of the participants may have a negative feeling before they answer the questions.
Focus groups provide a lot of details but can be expensive to set up. The numbers of participants is small so it is important to find the right people to take part in order to gain a view of the representative. It can take a while to set up a focus group and find participants. The information collected in this way is honest, accurate and valid and the participants in the group are very likely to all contribute.
Field trials provide a real representation of the marketplace in action, they can be expensive to conduct and the accuracy of the trial is dependent on a lot of factors. They can be very time consuming as they are usually conducted over a longer time period. The response rate can initially be high but many participants may drop out over time.
In task 4 and 5 we conducted market research for a new company opening in the local area selling car accessories. We decided that field trials, focus groups, observation and experiments would not be appropriate for the data we needed. They are more suited to existing companies that are changing or expanding. A new business also needs to consider time and costs as it is very expensive to open a new business. We decided that questionnaires would be the best option, conducting face to face questionnaires were very useful as we could look at how many people currently have cars and if they buy car accessories in the local area. This method was quick and cost effective. Looking at secondary research can also be useful for this business. Looking at statistics to find out how many people in the area own a car and looking at how well the competition do in nearby areas can provide a lot of information on how big the potential market is.
When a company brings out a new product there will probably be a lot of market research they will need to carry out to find out if the product has a chance of success and ways to improve those chances. For example when Tesco’s decided to open a stand alone baby product store they would have done extensive research when deciding if this would be a good idea. They would have looked at secondary research such as how many mums and children are there in the UK and in different areas of the country. They would have looked at their existing customers and how many of them were parents, this information would be easy to gather as they can look at their sales in baby products and information from Club card details. They could do primary research to find out how much people are prepared to pay for different baby items, what items parents want and what type of service they expect. They realised that parents wanted staff to be well trained in choosing baby products and able to give them the advice they needed. Finding out about their competitors, such as Mothercare and Babies R Us would also give them information that could help them to succeed in their venture. For example, finding out about their products, prices, turnover and locations are all ways they can help to develop their business.
M3 Analyse own research and findings and make recommendations on how marketing strategies could be adapted or implemented
In our research we asked 14 people, 7 female and 7 male, and a short questionnaire. From these results we found that more men owned cars than women, but women were more likely to buy car accessories. Women also tended to buy more car accessories than men. Many car accessory shops are very male orientated, and from these results we can see that women buy more accessories than men and our shop should be female friendly and neutral.
We could also see from our results that younger people were more interested in buying car accessories and interest seemed to fall as we get older. I think it would be very important to do a wider survey with a better mix of ages to see if this is still the case.
From the results we also found out that 43% wanted to have their accessories fitted professionally and 21% were happy to fit those their selves. We think from these answers that looking into training staff to be able to fit products and give advice on fitting them would be a good idea. We would need to look further at this by using secondary research to see what our competitors do regarding fitting accessories and primary research to see if customers felt this was a good idea and if it would increase the likelihood of them buying products in our shop. Although females were more likely to buy car accessories they were also more likely to want them professionally fitted.
In addition, from our secondary research findings, we discovered that a majority of the products sold are music products such as CD players, speakers and sound systems. Other products include rims, tyres, lights, and bumpers. Most of which will need to be fitted professionally. Our findings could have possibly opened up a niche for our organisation meaning that we are able to offer professional fitting services. By conducting focus groups we could find out how people feel about us offering fitting services and advice and possibly find more ideas to help with this decision in the business.
I also think it would be very important to gather more information on our competitors in the local area, finding out where they are located and trying to find information about their turnover and level of custom they get.
If the company was prepared to conduct more research it may be a good idea to change the question how far would you be prepared to travel to would you travel to Dunstable town centre or wherever they would be planning to open the store or would you prefer to travel to Dunstable town centre or Luton town centre. We already know that people are prepared to travel around 10-15 miles but this doesn’t help us deciding where to put the store as we do not always know the start location of the participant. It would be important to ask people about their personal details such as their address, job and other information like this to find out more about the type of people who would potentially be our customers.
I think we needed to include a lot more secondary research to find out about the population in Dunstable and Luton and the amount of people that were car owners in the area. We could find this information from looking at external sources like Government statistics, libraries, universities, company reports, specialist agencies e.g. Mintel, DataStream, Dun & Bradstreet and trade journals. Secondary research would be very useful to find out about the type of people that live locally and to see if they are the type of people who are likely to purchase products from our shop.
D1 Evaluate the market research method used by a selected organisation
Tesco have been very clever with the way that they are able to gather market research about their customers. Using information from Clubcard’s they are able to access a wealth of information that their competitors may find difficult to obtain. When customers sign up to the Clubcard they are asked various questions about where they live, how old they are, if they are single or married, their income, and if they have children. This information helps to see what category each person falls in, for example using the MOSAIC system. MOSAIC is a system that classifies households in the UK into 12 MOSIAC groups and 52 sub-groups called Mosaic types. These groups and types are formed on the basis that the households comprising them share certain characteristics.
Tesco worked with a small company who worked as market analysis to develop the Clubcard and to use the information provided from the Clubcard to monitor the spending habits of shoppers. For the first time, bosses at Tesco could see what was being bought by which customer. Assumptions about the way people shopped– notably that they bought everything from the same store – were shattered.
What became clear was a more complex picture of modern-day retail habits and the Clubcard, with its offer of personalized incentives to persuade people to fill these troubling gaps in their shopping baskets, proved both an eye-opener and a massive money-spinner.
Consumer data has helped shape the products they offer, Tesco have a better understanding of consumer segments and shopping profiles which has helped them to market themselves and form relationships with customers and build loyalty in customers and target particular groups with their marketing. This level of sophistication has made sure that Tesco remain the leaders within the market.
Tesco and Asda have both introduced products in selected stores to suit the needs of the customers living in those areas, for example in some stores they sell halal or kosher products.
I think this is a very clever way of finding out a lot of information about your customers and means they are able to advertise particular products, services and offers to specific people who are more likely to be interested in these items. For example Tesco would not want to waste money in advertising make up to men, MP3 players to elderly people and furniture to an 18 year old who still lives with their parents.
Tesco also use observation within their stores to see how people shop, it can show where people look what aisles they visit and how long they spend looking. This can help them to understand how their different customers shop and can give them the information to lay out their stores in a friendly inviting way that encourages customers to look at products they may not usually buy and may be interested in. Their stores are set up to encourage people to spend more money and they have managed to achieve this by using the information they have obtained through observation.
Tesco’s also look at their past sales to project them into future sales, surveying customer’s preferences and opinions and experimenting new products. Many new products are tried in a few stores to see how well they sell before they have to commit to buying a large amount of stock to sell in their stores nationwide. This is a good way of finding out how well a product will do as the cost of introducing a new product to only a small number of stores is not a substantial amount.
Market research is crucial to large department stores like Tesco. The vast range of products that Tesco provides necessitates detailed analysis if the company is to have any hope of "knowing their market". Using the methods outlined above Tesco can perform the following market research:
By looking at past sales Tesco can project future sales and, by projecting the sales of competitors, they can if they are likely to retain market dominance.
Surveys show that customers prize price above everything, closely followed by quality. They also show which supermarkets score highest in these categories. Tesco used these results in a brilliant advertising campaign by suggesting their products had the quality of Waitrose products and the cost effectiveness of Asda products. To stress their concentration on keeping prices low Tesco offer a price survey comparing the prices of essential, frequently purchased products, to the prices of similar products in other supermarkets.
Tesco have also been clever in experimenting with the introduction of new products. They have introduced high volume items, like best-selling CDs and jeans, where they can compete on price with traditional providers. After successful experiments, they continue adding new products of a similar nature.
Tesco have applied state-of-the-art market research to achieve market dominance in the UK, and significant inroads in other part of the world. Other companies can observe their advertising campaigns, web sites, and store layouts to draw key lessons of how they might proceed.
Tesco are a very successful company and they hold the highest market share. I think this is partly because they have been very successful at gaining market research and reading the information carefully and using it to implement changes into their business to make their customers happy and loyal.
D2 Evaluate the findings from the research undertaken
From our research we found that people were prepared to travel around 10 miles to purchase car accessories. We saw that the results averaged at 8.8 miles that people were prepared to travel but because there were people who did not own cars and therefore did not want to purchase car accessories this means our results has been lowered. Most people had answered that they were prepared to travel 15 miles.
From this we think that having a store close to Luton would be a very good idea as Luton is a bigger town with a higher population than Dunstable. This means we would attract customers from both towns and be more accessible to customers.
The answer is 10.2 purchases a year. Based on the 14 people we asked this equates to 142 purchases a year. This is just from 14 people and not all of them owned cars. We think that these results show that there are enough purchases being made to make our car accessory shop successful.
We also noticed in our research that is there was more women buying car accessories than there were men, which surprised us as we had assumed men would be more interested in buying car accessories. I think it is important to conduct the survey with a lot more people to see how these results differ. I also think that it would be interesting to carry out further research to find out the average spend because I think that men would spend more per purchase than women. But because we know women do go into car accessory shops regularly we think that aiming a range of products at women will be a very good idea to encourage them to spend more.
There should have been a lot more research to gather a better view of how customers shop and what type of customers to aim the products at. The research we conducted has given us information that is useful and relevant and also shown us what information we now need to gather to improve the information that we have. This will help us to make decisions and changes to the business plan for the car accessory company.
We conducted the questionnaires face to face and tried to ensure that we asked entirely random people but also asked an equal mix of male and females. I think that our questionnaire was not bias and I think the answers are accurate and valid. Since we conducted the questionnaires in groups in college I think although the answers are accurate and they are not entirely valid because we were only asking students, tutors and visitors to the college. If we asked people in different areas of Luton and Dunstable who represent different groups of people the results would give us a lot more information and we may see a big change in the type of data we have collected.
I think the information we have gathered has showed us that there is a need for a car accessory shop and has given us information to help us decide where to locate the store and shown us that it would be worthwhile having trained staff who can give advice and to install accessories for customers. I also think more research needs to be carried out to try and find out what type of products are sold but this can be done through looking at what our competitors sell and using a certain amount of trialling new products and asking customers what they would like to see being sold.
The secondary research we conducted showed us the type of products sold by our competitors and how much they are sold for. This is important as it means we can have an understanding of the type of products that people buy and how much they are willing to pay for them. We can also look carefully at the products sold in other stores to see if there are gaps in their product lines that we could fill and from this we could possibly expand the market and get new customers into store. This can help us with setting our prices; if we are able to sell them at a lower rate than our competitors then this can be advertised and can help encourage customers into the store. I think more secondary research needs to be conducted to get a better understanding of our competitors.
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