Part 1
Different types of market research
An organization, for instance, a furniture business will select the type market research based on the information it intends to acquire from the market. The need for research in business cannot be overemphasized because of the tremendous role that it plays in enabling an organization to know its market better and formulate effective marketing strategies based on the findings of their investigations that includes customer analysis, risk analysis, and the understanding of the competition (Wahyuni, 2012). Effectively, two broad types of market research are available for organizations. In this section, the paper evaluates these types of research and their categories.
Primary research methods
Primary research methods collect origin information direct from the market. It implies that an organization is seeking new information from the market for different purposes. In the case of the furniture company, the purpose of such an investigation is to find if there is a market for the models that the organization manufactures. Different forms of primary research methods exist and include surveys and questionnaires, focus groups, trials and experimentation or product testing, in-depth interviews, and observation. Primary research is done once one has obtained information from secondary research carried out using secondary sources of data. The gathering of primary data is done using both qualitative and quantitative research methods (Wahyuni, 2012). Imperatively, an organization must find the best primary method that it needs to use in carrying out its investigations. For instance, surveys and questionnaires can allow the researcher in a marketing department within an organization to analyze a sample group that represents their target market. It is suggested that the large the sample, the more reliable and accurate the result.
Surveys may involve giving feedback forms to customers concerning their ratings for services offered on product satisfaction levels (Eriksson & Kovalainen, 2015). Secondly, observation is an effective primary method of research where a researcher can get information from consumers by interacting with them or communicating with the subject. Observation is more personal than surveys because it accords the participants the opportunity to interact with a researcher and relays more accurate feedback. Focus group as a method allows the moderator to script a series of questions in leading a discussion among a particular group. Most of the focus group sessions last for about two hours and a researcher may need two to three groups to achieve a balanced result. In-depth interviews, particularly personal interviews, use unstructured, open-ended questions to gather information from a participant (Eriksson & Kovalainen, 2015). However, focus groups and personal interviews tend to be more subjective than surveys because of the personal touch between the researcher and the participants. Field trials and testing is used when a manufacturer wishes to find out the reaction from consumers in the market concerning a new product. The aim of such research is to induce product modifications, adjust prices or improve the packaging and the design of the product (Wahyuni, 2012). For small start-ups, establishing a rapport with the local stores online websites can help them carry out trials and product testing.
Secondary research method
The essence of secondary research is to collect information from existing sources. The method involves the gathering of the information with the purpose of coming to a particular conclusion (Eriksson & Kovalainen, 2015). Effectively, most research studies begin by the researcher gathering data using available sources that include internal sources, Internet sources, existing research publications, and information from external sources. The majority of external sources of information include industry bodies’ reports, government agencies’ findings, libraries sources and local authorities’ investigations (Bryman & Bell, 2015). Secondary sources allow one to make the most out of the available information regarding the market situation. The major hindrance with the secondary sources of data is that it is difficult to get the precise information that one needs. The interpretation of the secondary information is another challenge as it may have been collected for different purposes. Furthermore, the information may be from a different market segment that is irrelevant to the study. Finally, the information may be out-dated because of the dynamic forces that dictate market trends, especially in a globalized business environment.
Part 2: Case Scenarios
Scenario 1
The relationship that exists between the number of houses sold per year and the amount of furniture bought is derived by evaluating figures from relevant bodies and industry players. A furniture company that wishes to find out the number of properties sold within the year needs to rely on secondary sources of information from realtors in the market. Secondary sources of information include data that has already been collected and compiled and analyzed by the relevant bodies. Effectively, the research department can use such data to ascertain the units sold from real estate developers, government agencies, and furniture firms (Bryman & Bell, 2015). Additionally, the department can use primary sources by conducting in-depth interviews with players in the real estate industry to gather their attitudes and their views based on the growing numbers. The advantage of in-depth interviews is that a researcher can access the origin and accurate information from the industry (Wahyuni, 2012). However, secondary sources may provide such information at low-cost as compared to the interviews.
Scenario 2
Several ways can be used to find out who comes to each of the twenty different shops based on the age, sex, and marital status. The department can use both primary and secondary sources of research to get the information on the shops’ demographics. One of the secondary sources they can rely on is the use of internal data where the organization reviews the customer information based on previous purchases they have made from the shop. Such information can be gathered from the inventory records, sales figures and information relating to customer visits per day in all the different shops.
On the other hand, the organization can use primary method through the application of observation and focus groups. Using observation approach, the department will get data on the future projections based on the feedback they will receive from potential customers or existing customers. Again, observation will accord them an opportunity to interact and communicate with the customers so that they can understand their preferences, tastes and attitudes. The second primary method they can use is focus groups (Wahyuni, 2012). For instance, through the method, they can target a particular segment of the shoppers and ask them insightful questions that will enable them to get information concerning their age, marital status, and even sex though may be obvious. Finally, they can also use surveys and questionnaires where they can encourage the customers to pick feedback forms at the exit, fill them and send them back. The forms may include sections where the marketing team asks the customers their age, sex, and marital status.
Scenario 4
The changing buying behavior among customers is not new for any marketing teams in the global business environment. Effectively, organizations through their marketing and research departments must consider ways to investigate how consumers buy furniture today. The implication of such an understanding is to carry out research (Bryman & Bell, 2015). An organization can find out these changes and their causes using both secondary and primary research approaches. Secondary research involves the use of existing information that is relevant to the study. Such information may emanate from internal sources where the organization may find out the causes based on customer preferences. For instance, a new furniture model may be selling more than other models. The implication here is that customer preferences have changed based on the new attractive model.
Secondary external sources may include a study of relevant theories that explains consumer buying behavior and what instigates these changes (Bryman & Bell, 2015). Based on what the theories propose, the organization can evaluate the changing nature of the buying behavior among its consumers. Additionally, the organization can carry out primary research using observation, trials and experimentations and personal interviews. For instance, the furniture organization can introduce a new model and allow consumers to test it on limited edition. Once they have done the trials, they will get feedback from the customers to underscore their changing attitude and buying behaviour (Jacob & Weiber, 2015). Observation can be carried out by interacting with the customers on a more personal level to get their feedback based on the question asked by the researcher. Furthermore, personal interviews can yield valuable insights into customer attitudes and are exceptional ways of uncovering issues related to new products development, especially in a fast-changing consumer market.
Part 3: Importance of market research to the success of a business
Market research plays a pivotal role in the success of any business. The need for research for a business grows from the fact that good research allows the organization to answer critical market questions so that it can grow and expand sustainably in the market. One of the reasons for market research is to the gathering of market information. The market information includes factors like the size of the market, sales revenues, market segmentation and the demand scenario (Jacob & Weiber, 2015). For instance, furniture industry is a fast-changing sector that requires market information regularly because of the changing consumer behavior occasioned by different new models that come up now and then. Therefore, market research allows an organization to adapt to the changing trends to stay in the business and satisfy its customer needs. Research information is critical in developing business strategies for products pricing, distribution, advertising, and making decisions concerning a new product. Therefore, research allows a business to make better and informed decisions, can consolidate its operations and allows it to diversify for the benefit of the consumer.
Research enables an organization to resolve business problems and identify opportunities for its growth. For instance, low sales of furniture may be attributed to poor customer services. However, without research, a business may not know this problem and how to solve it. Additionally, the organization can identify existing gaps and new business opportunities, for instance, the untapped segments of the consumer market (Boons & Lüdeke-Freund, 2013). Moreover, research can enable a firm to understand the changing trends in the market and take advantage to improve its business. For instance, a shift in population and increased leisure spending may be significant to businesses in the furniture industry because of projected increase in demand for the products. Market research is fundamental in the expansion of business. An enterprise that seeks expansion must carry out research to determine the extent of the market, potential customers, and the growth strategies that it can adopt, for instance, franchising or joint venture, and formation of strategic alliances. Research is an essential step in keeping competition at bay. The comparative studies of the market ensure that the business identifies its growth strategies and how to tame competition for its survival. Business can only formulate competitive strategies through effective market research. Furthermore, research is an efficient way to improve communication with a firm’s target customers and minimizes risks through accurate analysis of the customer needs and demands.
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