Unit 10 - P1 Market Research in Business

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Every organisation partakes in market research in order to gain information about their target customers, rival companies and the market they invest in. Businesses carry out two different forms of research; Primary and Secondary. Primary research is an exclusive type of research which is carried out by the business first hand. On the other hand, Secondary research includes gathering research that has already been done from an outside source and is not exclusive to the company. This type of research has already been carried out by someone else; anybody can access secondary research data. Secondary research can either be internal or external. Primary Methods of Research Observation - A business can use observation as a source of primary research when inspecting the customer’s actions. When using observation as a method of primary research, the examiner and the customer are not interacting with each other. This makes it more difficult for the researcher to interpret customer behaviour. On the other hand, observation does not distort customer behaviour so a realistic analysis of the customer’s behaviour is recorded. The most common observation technique is the mystery shopper. The mystery shoppers go into supermarkets and restaurants and pretend to be a customer while observing the services received. After, they write a report on what they observed and hand it into the organisation for further review. Experimentations – This is used to gain information on products and consumer performance. Experimentations involve businesses developing an environment where the researcher changes certain elements of the situation whilst analysing the effects. For example, a business like Tesco could lower the price of their apples for 6 weeks to see if more customers would purchase them. After 6 weeks, they may raise the price again and see if customers will still buy the apples
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