Limits and Considerations of Market Research for Tesco's

Explain the limitations of market research in terms of helping the development of a marketing plan for either McDonalds or Tesco (M2) Tesco uses primary type of research to gather information about its customers, competitors and the environment. Tesco collects information that has not been collected before and uses both internal and external primary research methods. Internal research includes: Tesco’s customer data whereas external research would include: questionnaires and surveys, experimental introduction of a new product, interviews and focus groups.

Tesco is likely to use secondary research data to help determine what type of primary data is required to be precise and not to waste time and money on gathering data that has already been gathered before. Other types if methods used by Tesco are qualitative and quantitative research. Qualitative research is used when wanting to find out more about customer’s needs, personal experiences and background by asking open questions such as; asking what products they buy most often at Tesco and what their preferences.

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Tesco also uses quantitative research which includes Tesco’s sales, percentage of customers choosing the same answer in a quantitative questionnaire and can later be analysed. Market research is very beneficial for a business such as Tesco, however it can sometimes be a difficult process as there are a few limitations that affect Tesco’s marketing plans. Every marketing research has the potential to be wrong therefore Tesco should plan its research techniques are very expensive and are not affordable to certain businesses therefore Tesco has to make sure that the cost of the research matches it quality.

Another limitation of marketing research is reliability, which shows how reliable the information collected is and whether the information would be the same if collected from a different group of people.

Tesco should target the most suitable groups of people to question in order for the information to be effective and beneficial for the organisations marketing plans, such as; to improve customer service at Tesco has to make sure that the information gathered is accurate as people might answer randomly out of laziness and the end result would end up being inaccurate, causing Tesco to carry out another research, costing them both time and money. Tesco collects its customer’s information for organisational purposes, however there is an act that protects the use of customer’s personal information by the business; Data Protection Act 1998 which controls how personal information is used by organisations. Tesco needs to ensure that the information on this data is:

• Kept up to date and not kept longer than necessary
• Not transferred to any other country without adequate protection
• Processed in accordance with the ‘’data subjects’ (the individuals) rights

This act is very beneficial for the customers whereas Tesco will be sued under this act in an event of loss of information or in case where customer’s information is accessed by inappropriate individuals or organisations. This would have a great impact on Tesco as it holds information of millions of customers and the amount of money Tesco would have to pay each customer would be a very large amount, leaving Tesco in loss and affecting its Marketing Plans such as: expansion. Tesco wouldn’t be able to hold customer interviews as they have customers in a lot of countries in Europe. This would take up a lot of their time as they wouldn’t be able to get the opinions of all their customers. Although Tesco aim to provide an excellent customer service, they cannot achieve this by using this type of research.

Surveys could be a bad idea too as they can be costly to create a questionnaire, but once set up can used for a large sample. It could also lead to Tesco not actually getting their surveys back from customers. It takes time to create a survey/questionnaire which is then is slower when trying to get as many back as you possibly can. Lastly focus groups wouldn’t be of any use for Tesco as they do not need people to taste anything or try certain objects. Setting up a focus group can be very expensive and needs to take place in a specific location. Often a focus group is observed through a one-way mirror, which would take up a lot of Tesco’s time trying to find a location that has these things. The information gathered for market research is very useful and reduces the chances of the business making the wrong decision. Before coming up with a marketing play Tesco must always conduct research in order to have an ideas of whether the plan is an appropriate thing for the company.