Market Research Methods and Limitations

This section explores various primary and secondary market research methods, their advantages and disadvantages, and the limitations of market research, including sample size and bias.

Primary Research Methods

1. Observation
2. Focus groups
3. Surveys
4. Interviews

Each method has its strengths and weaknesses:

• Focus groups provide detailed qualitative information but are expensive and time-consuming.
• Surveys are easy to collect answers from but may give a distorted picture of customer opinion.
• Interviews offer detailed insights but are costly in terms of time and money.

Secondary Research Methods

1. Google searches
2. Published market research reports
3. Media reports
4. Competitor data

Vocabulary: Qualitative research is based on views and opinions, answering questions like "why," "would," and "how." Quantitative research is based on numerical data, addressing questions like "how many," "how often," and "who."

Limitations of Market Research

The guide discusses two main limitations:

1. Sample Size:

   • The amount of data collected from customers or potential customers
   • A representative sample is crucial for good research
   • Unrepresentative samples can lead to incorrect conclusions

2. Bias:

   • Can occur in research questions
   • May lead to findings that don't accurately reflect the views of the target audience

Highlight: Understanding the limitations of market research is crucial for interpreting and applying research findings effectively in business decision-making.

IT in Market Research and Market Segmentation

This final section examines the growing use of IT in supporting market research and introduces the concept of market segmentation.

IT in Market Research

The use of IT has become essential in modern market research:

• Complex algorithms can uncover patterns and correlations in data
• Data mining, an example of secondary research, allows for quick and automated analysis of huge data sets
• Social media platforms serve as both primary and secondary research sources

Example: Data mining is a secondary market research technique that relies on existing data, is quick and automated, and can analyze huge data sets without the need for sampling.

Market Segmentation

Market segmentation is the process of dividing a market into smaller sections containing customers with similar needs and wants.

Benefits of market segmentation:

• Aids new product development
• Better matches customer needs
• Identifies opportunities for growth
• Helps make the marketing mix more effective

Definition: Market segmentation in A-Level Business is the strategic process of dividing a broad target market into subsets of consumers with common needs, interests, or priorities.

Main bases of segmentation:

1. Demographic: age, gender, family lifestyle, religion, nationality, ethnicity, occupation
2. Geographical: nations, regions, cities, neighborhoods
3. Psychographic: personality traits, values, attitudes, interests

Highlight: Effective market segmentation enables more targeted and efficient marketing strategies, allowing businesses to better meet the specific needs of different customer groups.