IGCSE Business Studies - 3.2.1 Methods of Market Research

Factors Influencing the Accuracy of Market Research Data

Market research is crucial for businesses to make informed decisions. However, the accuracy of the data collected can be affected by various factors. Understanding these factors is essential for interpreting research findings and drawing reliable conclusions.

1. Sample Size

The size of the sample is a primary determinant of data accuracy. A larger sample size generally leads to more accurate results.

• Large Sample: Provides a more representative view of the target market. Reduces the impact of random variations.
• Small Sample: May not accurately reflect the characteristics of the entire target market. More susceptible to errors.

2. Sample Selection Method

How the sample is chosen significantly impacts its representativeness.

1. Random Sampling: Every member of the target population has an equal chance of being selected. This is the most reliable method for ensuring representativeness.
2. Systematic Sampling: Selecting members at regular intervals (e.g., every tenth person). Can be accurate if the population is ordered randomly.
3. Convenience Sampling: Selecting readily available participants. Often biased and not representative.
4. Quota Sampling: Dividing the population into subgroups and selecting a predetermined number of participants from each subgroup. Can be useful but may still introduce bias.

3. Response Rate

The percentage of selected individuals who actually respond to the survey or participate in the research.

• Low Response Rate: Can introduce bias if those who don't respond differ significantly from those who do.
• High Response Rate: Generally indicates a more reliable dataset.

4. Question Design

The way questions are phrased can influence the responses received.

• Leading Questions: Questions that suggest a particular answer. Biased and unreliable.
• Ambiguous Questions: Questions that are open to multiple interpretations. Lead to inaccurate data.
• Double-Barreled Questions: Questions that ask about two things at once. Difficult to answer accurately.
• Neutral Questions: Clear, unbiased, and easy to understand.

5. Data Collection Methods

The method used to collect data can affect its accuracy.

Method	Advantages	Disadvantages
Questionnaires (Online/Paper)	Relatively inexpensive, can reach a large audience.	Low response rates, potential for dishonest answers.
Interviews (Face-to-face/Phone)	Allows for clarification, can gather in-depth information.	Time-consuming, expensive, potential for interviewer bias.
Observation	Provides direct evidence of behavior.	Can be time-consuming, observer bias, Hawthorne effect (participants change behavior when observed).
Focus Groups	Generates rich qualitative data, explores opinions and attitudes.	Can be dominated by certain individuals, potential for social desirability bias.

6. Social Desirability Bias

The tendency of respondents to answer questions in a way that they believe is socially acceptable, even if it's not truthful.

This can lead to an overestimation of certain behaviors or attitudes.

7. Recall Bias

In surveys asking about past behavior or experiences, respondents may not accurately remember details.

This can be influenced by factors such as the passage of time and memory distortion.

By understanding these factors, businesses can take steps to minimize their impact and improve the accuracy of their market research data.