1.1.2 Market Research

Question 1

What is Product Orientation?

Answer 1

An inward looking approach to new product development where the key focus is on what products can be made and the production process

Question 2

What is Market Orientation?

Answer 2

An outward looking approach to new product development where the key focus is on what products the consumer wants

Question 3

What is Market Research?

Answer 3

The collection and analysis of data and information to inform a business about its market.

Question 4

What does effective market research do?

Answer 4

• Reduces risk
• Finds out what consumers need and want
• Businesses can predict how much demand there will be for its products
• Understand consumer behaviour
• Work out how much consumers would be prepared to pay for a product
• Identify current / potential customers

Question 5

What is Quantitative Research?

Answer 5

The gathering of statistical data to inform the company about people’s behaviour but does not identify the reasons.

Question 6

What are the advantages of quantitative research?

Answer 6

1. Easier to gather than qualitative
2. Quicker to gather than qualitative
3. Faster to analyse
4. Examine larger samples
   - -> averages
5. Easier to make decisions from quantitative data

Question 7

What are the disadvantages of quantitative research?

Answer 7

1. Tends to have narrow/closed questions
   –> E.G. Who/What/When
   Not Why? How?
2. Unhelpful if you want to understand the issue in depth

Question 8

What is Qualitative Research?

Answer 8

The gathering of non-statistical information that gives a company an in-depth insight into the reasons for human behaviour.

Question 9

What are the advantages of qualitative research?

Answer 9

1. Creates in depth data to help understand the issue in depth
   - -> With the How? and Why?

Question 10

What are the disadvantages of using qualitative research?

Answer 10

1. Slower to gather than quantitative research
2. More difficult to analyse data
3. Harder to make business decisions from qualitative data

Question 11

what is Primary Market Research?

Answer 11

When a business gathers new data either themselves or they employ someone to do it on their behalf.

Question 12

What are the methods of primary market research?

Answer 12

• Questionnaires —-
  |—> These ask lots of questions and can be done via post, in person, internet etc
• Surveys —————
• Observations –> Consumers are watched in a normal shopping environment to get an insight into
  their behaviour
• Interviews –> Usually done one-on-one with a researcher
• Focus groups –> Where a group of around 8 people discuss their opinions e.g. about a product
• Test marketing –> Launch a product in one region and measure sales and customer response
  before launching it across the country
• Sampling –> Used to make predictions about the whole market based on a sample

Question 13

What are the advantages of primary market research?

Answer 13

1. Data is up to date and current
2. The data is more reliable
3. The data is specific to the purpose its needed for
   - -> This is great for niche markets

Question 14

What are the disadvantages of primary market research?

Answer 14

1. It is time consuming
2. Expensive
3. Its Labour intensive

Question 15

What is Secondary Market Research?

Answer 15

When a business conducts market research using data that already exists and is already available.

Question 16

What are the methods of secondary market research?

Answer 16

• Government publications
• Market reports
• Internet sources

Question 17

What are the advantages of secondary market research?

Answer 17

1. Easier to get hold of information
2. Short research time
3. Low cost

Question 18

What are the disadvantages of secondary market research?

Answer 18

1. Data would most likely be out of date

2. Not necessarily specific for the purpose of the reseach

Question 19

What is primary and secondary market research data used for?

Answer 19

1. Identify and anticipate customer needs and wants
2. Quantity likely demand
3. Gain insight into consumer behaviour

Question 20

What type of market research should a small business use?

Answer 20

A small business should use primary market research (despite costs) to get a ‘competitive edge’

Question 21

What is Bias (in Market research)?

Answer 21

When research findings cannot be trusted because of the way the research has been carried out

Question 22

Why use technology to collect market research?

Answer 22

Using technology makes market research easier, cheaper and quicker. It can be used to get a lot more information than traditional research methods and it’s easier to reach a wider sample of consumers.

Question 23

What are examples of ICT (Information and Communication Technology) businesses can use?

Answer 23

• Websites
• Social network
• Databases

Question 24

What is Market Segmentation?

Answer 24

Dividing a market into identifiable segments in which reflects different consumers needs and wants.

Question 25

What are the main categories of market segment?

Answer 25

1. Demographic Segments
   - -> Age
   - -> Gender
   - -> Socio-economic class
2. Geographic Segments
   –> Market can be divided up according to neighbourhood, city, county, country, world region
   –> It’s a method used mostly by multinational companies as their customers have a range of
   cultures, lifestyles and climates and are likely to need different marketing mixes.
3. Income Segments
4. Behavioural Segments
   - -> Amount of use
   - -> Lifestyle
   - -> Hobbies and interests