Page 159 - Cambridge IGCSE Business Studies

11: Market research
Supermarkets oft en use
observation to see the behaviour
of customers
Marketing mix:
see Chapter 12, page 164.
The main advantage of observation in primary research is that what consumers
do is often more accurate than what they say they do when answering questions
asked by interviewers or on a questionnaire. Some businesses also use observation
to check the quality of service they are providing to customers. For example a
hotel might use a ‘mystery guest’ to visit and stay at the hotel and report back to
management about their experience.
The main problem with this method of research it is that is often more expensive
than other methods because of the need to have trained observers to analyse
customer behaviour and there is no opportunity to ask consumers why they
behaved as they did.
Test market
A limited quantity of the product is produced and sold in a carefully selected area
of the market. The test market is chosen to represent the total market. Feedback
from consumers is used to make changes to the product or other elements of the
marketing mix, such as pricing, promotion and place where the product is sold,
before launching the product to the main market.
The main advantage of test marketing is that the cost of any problems is limited
to a smaller output – the quantity produced for the test market. Identifying and
solving problems in the test market increases the chance of a more successful
introduction of the product into the main market.
The main limitations of test marketing are that it takes longer to get the product
to its main market and the cost of producing products for the test market makes
this method of primary research more expensive than other methods.
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Consumer surveys
Surveys can collect both qualitative and quantitative data, often with the aid of a
questionnaire. There are several methods used to survey consumers or potential
consumers including:
Interviews
A trained interviewer asks questions to an interviewee and records their answers.
The interview might take place in the street, in the businesses premises, for
example a supermarket, or in the interviewee’s own home. Some interviews may be
conducted by telephone.
The main advantages of interviews are that the interviewer can explain any
questions that the interviewee does not understand and they can often tell if the
interviewee is replying honestly – if not then their responses can be ignored and
this reduces the risk of collecting inaccurate data.
One of the main limitations of interviews as a primary research method is that
it is more expensive than some of the other methods if trained interviewers are
used. If trained interviewers are not used then there is a greater risk of the data
collected containing bias. This is because the interviewer asks questions in such a
way that makes the interviewee give an answer which does not represent their true
feelings.
Postal surveys
Questionnaires are posted to people’s homes and they are asked to complete and
return them.
This is a good way of getting the views of a population spread over a wide
geographical area and is much cheaper than the interview method.