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Market research is integral to the Internal Assessment in Business Management. Students can use primary and/or secondary market research sources for a real-world business that faces a problem or specific issue.

For the Internal Assessment, students can use exclusively secondary market research sources, focusing on three to five supporting documents. This is often more practical than having to use primary market research techniques which are often more time consuming.

 Case Study - "New Coke": The world's marketing blunder of all time?

One of the biggest marketing mishaps in corporate history occurred when The Coca-Cola Company tried to change the formula of a drink loved by its customers across the world. Market research may have helped to easily avoid such a huge and costly mistake.

On April 23, 1985, The Coca-Cola Company had change the formula (and therefore taste) of the company's and world's most popular soft drink: Coca-Cola (also known as Coke). This was the first attempt by the company, founded in 1886, to make any changes to the first and original formula in 99 years. The company’s intention was to reenergize its Coca-­Cola brand given that cola was its largest market and the growing emergence of Pepsi Cola as a threat in the industry.

However, this change was not readily welcomed by customers, especially those in the USA. The taste change prompted Coca-Cola's customers to hoard the original Coke. In addition, they went as far as holding employees of The Coca-­Cola Company personally responsible for the change. Some customers even became depressed by the thought of losing their favourite soft drink, a product that had become symbolic with American culture.

Protest groups such as the Society for the Preservation of the Real Thing and Old Cola Drinkers of America (which claimed to have recruited 100,000 people in a drive to bring back the "old" Coke) had popped up across the USA. Songs were written and released in honour of the old taste. Protesters at a Coca-Cola event in downtown Atlanta in May 1985 carried signs stating "We want the real thing" and "Our children will never know refreshment" (It's the real thing and Be Really Refreshed were two of Coca-Cola's corporate slogans).

In July 1985, less than three months following the change to New Coke, the company announced that it would revert back to the original formula Coca-­Cola, thus ending a 79-­day crisis of protests and negative public relations. This decision is viewed as a testament to the power of consumers in an ever-competitive corporate world.

The Coca-Cola Company’s decision to revert back to the original formula made headline news in all major newspapers and media platforms across the USA and changed the dynamics of the soft drinks industry. Sam Craig, professor of marketing and international business at the Stern School of Business at New York University at the time, pointed to what he and other industry observers have long considered a fatal mistake on Coca-Cola's part. “They didn't ask the critical question of Coke users - Do you want a new Coke? By failing to ask that critical question, they had to backpedal very quickly.”

A strong point can be made for listening to customer suggestions for new product ideas prior to any product launch, thereby preventing a possible crisis such as the one faced by The Coca-Cola Company. For many businesses, the secret to success in today’s rapidly changing business environment is to roll out new products quickly. But for others, such as Coca-Cola, caution must be exercised. Unless a business continues to research consumer reactions to a given product, it may lose sales because it has failed to anticipate a change in the tastes and preferences of their consumers.

Market research may prevent a product failing and consequently save the business large sums of money (and embarrassment) in the long run. With hindsight, Coca-Cola should have undertaken extensive market research by asking consumers to record their reaction to a new cola. Only if the reaction was significantly positive should the new cola product have been launched on such a large scale.

Thus, without effective market research, what may appear to be a great idea on paper can fail due to materialise in the real corporate world in gaining the attention and trust of customers. As a consequence, such business ideas can fail in the marketplace.

Source: adapted from www.thecoca-­colacompany.com

 Key Concept - Ethics

Ethics are the moral principles and values held by society. When it comes to the ethics of market research, this refers to all aspects of how the research is designed to how the results are shared and presented. Ethics need to be considered in order to minimise or prevent researcher bias and to gain public trust. In the worst-case scenario, unethical practices can lead to criminal action being taken against the organization. Instead, an ethical approach to market research helps to generate objectivity and findings that are more representative.

Ethical considerations of market research include the following:

1.  Purpose of use

Participants need to be told what information is being collected and what it is to be used for. Participants should be informed that they are part of a market research activity, and have the legal right to opt out if they so wish. For example, telephone calls are often recorded, so research participants must be informed that these are for “monitoring and training purposes”. Many websites use 'cookies' to track the user’s browsing history. Users should be informed about this when visiting websites for the first time.

2.  Confidentiality

Research participants should be reassured about the confidentiality of their personal data and responses. This not only provides needed reassurance, but can encourage research respondents to answer more openly and honestly. Information should only be obtained for its stated purpose. Firms must not sell their research data to third parties without receiving prior consent. For example, researchers should not sell data about household income to retailers and other businesses. Breaching trust and confidentiality are clearly unethical practices.

3.  Selection of research subjects

Market researchers need to be sensitive to using vulnerable groups of research participants, such as children and the elderly. In the case of children, researchers probably need to gain written consent from the parent before undertaking the research. Again, the purpose must be clearly communicated. Similarly, it would be rather unethical (and biased or pointless) asking a group of drivers only for their views on petrol prices or the cost of motor insurance premiums.

4.  Researcher bias

Biased market research can also be caused by the researcher asking (mis)leading questions. Deliberately, asking people leading questions can quite easily influence how they respond, thereby adding bias to a survey or interview. By contrast, ethical considerations would mean questions are free from deliberate researcher bias (such as stereotyping and prejudices). Importantly, the market researcher should not make any direct attempt to influence the opinions or attitudes of the research participants.

5.  Presentation of findings

Similarly, market researchers should not manipulate data and information in order to change the results. Deliberately ‘cheating’ (changing or influencing) the outcome of a research activity is unethical, especially if the research data is used for personal gain.

 Watch this short 5-minute video featuring Jeremy Paxman who uses leading or provocative questions in an interview with Bill Gates (who gets a little annoyed by this approach, when asked "Let me put it another way, as a statement of principle, are you in favour of people paying as much tax as possible?")