Market Research involves finding out whether people will be prepared to use your good or service. It is essential to carry it out before producing a good or service. There is no point in a business investing time and money in producing a new good or service if people do not want to buy it. Market research is also used for keeping businesses up to date with consumer reaction to their existing goods and services, showing where changes in the item itself, or its price, might be necessary. The firm must decide which Market Segment it is aiming for; in other words, the sort of people they think will buy their product. This can be measured by social class, age, gender or geographical location
There are two types of market research:
PRIMARY/FIELD RESEARCH
This involves asking people directly – usually by questionnaire, survey,
or cold calling on the telephone. It is necessary to be sure that you target
your questions at the type of people likely to use your good and that you ask
sufficient people – a representative sample. Questionnaires should only
ask relevant questions and should be quick to fill in – mainly ‘tick
box’, closed questions.
Primary research is likely to give accurate results but costs time and money to complete. Allowance needs to be made for untruthful answers.
SECONDARY/DESK RESEARCH
This involves the analysis of your primary research and also such sources as
magazines, journals, census returns and CD-Roms.
It is cheaper and quicker to carry out than primary research but, on the whole, will not give such up to date and accurate results.