1.1.2 Market Research

Question 1

Define product orientation

Answer 1

When a business only focuses on the product/production process

Question 2

A business is product orientated when…

Answer 2

• there is little competition in the market
• there is little consumer knowledge
• customers have limited funds

Question 3

Define market orientation

Answer 3

When the business focuses on the customer when providing products. Usually gives the customer more control, allowing them to make choices.

Question 4

What are the benefits of market research

Answer 4

• reduced risk
• quantify demand (forecast sales)
• idea of pricing
• identify competitors
• understand consumer behaviour

Question 5

Define primary market research

Answer 5

Collection of NEW first hand data that is SPECIFIC to the needs of the business

Question 6

Identify 5 primary research methods

Answer 6

Questionnaires / surveys 
Observation 
Interviews 
Test marketing 
Focus group

Question 7

Advantages of primary research

Answer 7

• addresses the specific issues you are interested in
• data is up to date
• can help to understand consumer psychology
• valuable information that can be used to gain a competitive edge isn’t available for competitors

Question 8

Disadvantages of primary research

Answer 8

• expensive costing thousands of pounds to do properly
• risk of bias from questionnaires or interviewers
• may need to compare with other information to understand the meaning of the findings
• costly

Question 9

Explain why sample size and sample bias may make market research unreliable

Answer 9

Sample size - if the sample size is too small then the data will lack statistical validity and it will be difficult to apply the findings to the whole market

Sample bias- the way respondents are selected may over-represent certain types of people which may skew the results

Question 10

Define secondary research

Answer 10

Gathering data that already exists

Question 11

Identify 5 secondary research methods

Answer 11

Government sources
Trade publications 
Reports 
Internet sources
Media (newspapers/magazines/TV/radio)

Question 12

Define qualitative research and how it is gathered

Answer 12

Seeks to gather and explore FEELINGS and THOUGHTS about a product from consumers 
Gathered by 
- focus groups
- interviews 
- observations

Question 13

Define quantitative research and how it is gathered

Answer 13

Involves gathering data and MEASURING responses usually displayed in charts/graphs
Gathered by
- questionnaires
NOTE: quantitative research requires a LARGE sample

Question 14

3 ways IT supports market research

Answer 14

1. Websites can gather information about online shoppers’ or browsers’ interests
2. Social media can offer information about consumer attitudes to a product or service + allows for relationship building for business and customer
3. Business databases can be used to get info on consumer behaviour

Question 15

Define market segmentation

Answer 15

Discovering useful ways to split up a market into different groups of consumers who share similar characteristics and needs.

Question 16

Benefits of segmenting a market

Answer 16

• Products and services can be designed to suit specific consumers
• meeting customers’ needs precisely allows a higher price to be charged
• promotional activity is easier to target
• brand loyalty

Question 17

Identify some ways a market could be segmented

Answer 17

• by location e.g. target rural or urban
• by lifestyle e.g. target parents
• by income e.g. target lower income groups
• by age e.g. targeting over 60s
• by gender e.g. targeting women

Question 18

advantages of secondary research

Answer 18

• quick and instant
• less costly to gather

Question 19

disadvantages of secondary research

Answer 19

• may be too broad and not specific enough for the businesses needs
• could be out of date
• information is accessible to competitors so there’s no competitive edge

Question 20

evaluate the use of quantitative data

Answer 20

+ easier and quicker to gather
+ easier and quicker to analyse
+ easier to use large sample sizes which are more representative
+ easier to make decisions on
- closed or narrow questions don’t give an explanation or lack depth

Question 21

evaluate the use of qualitative data

Answer 21

+ creates more depth, and may make it easier to draw conclusions from the data
- slower to gather
- harder to analyse and display the data
- harder to make decisions based on it as it is subjective

Question 22

drawbacks of Market segmentation

Answer 22

• costly, research and development, marketing and changes to production
• trying to appeal to multiple market segments may broaden the product range a business offers making it more difficult for them to exploit economies of scale