1.1.2 Market Research

Question 1

Primary research

Answer 1

new
research conducted for a
particular purpose.

Question 2

Secondary research

Answer 2

Secondary research uses
pre-existing data that has
been gathered for another
purpose.

Question 3

Quantitative data

Answer 3

factual, often numerate data that is intended to be statistically
representative of the whole market. Quantitative research
is research conducted
on a large-enough scale
to provide statistically
reliable data, usually aimed
at discovering factual
information about how
customers behave.

Question 4

Qualitative data

Answer 4

Qualitative data contains opinion
and is unlikely to have been gathered on a large enough scale to give
statistically reliable data. It is designed to give insight into why customers
behave the way they do.

Question 5

Secondary research advantages

Answer 5

• Often free
• Provides a good
market overview
• Usually based on
large-scale, reliably
produced research

Question 6

Primary research advantages

Answer 6

Directly focused on research objectives = fit for purpose

Tends to be more up-to-date than secondary research

Provides more detailed insights – particularly into customer views

Question 7

Secondary research disadvantages

Answer 7

Information may be out
of date. 
Not tailored to suit
your particular needs. 
Can be expensive
to buy published
research reports on
markets

Question 8

Primary research disadvantages

Answer 8

Expensive, costing
thousands of pounds to
do properly.
Risk of bias from
questionnaire and
interviewer.
May need to compare
with other information
to understand the
meaning of findings

Question 9

Secondary research methods

Answer 9

The internet
Trade press
Government statistics
Past internal sales figures

Question 10

Primary research methods

Answer 10

Focus groups
Interviews (online & in-person)
Surveys & questionnaires
Mystery shoppers
Product testing and product trial

Question 11

Limitations to market research

Answer 11

Why market research May not be reliable- Sample size too small: This means that there is more chance that
respondents who do not reflect the overall views of the market are
over-represented in the sample.
• Sample bias: The way that respondents are selected may over-represent
certain types of people whose views may skew the overall findings
away from the views of the total population being researched.

Question 12

Use of ICT to support market research

Answer 12

• Company websites can gather data on visitors to the website which can
provide some information about online shoppers’ or browsers’ interests
• Social media can also offer information on consumer attitudes to
a product or service, and even allow for an element of relationship
building between the business and consumers.
• Database technology, which has advanced so far in recent years, allows
vast quantities of data relating to consumers to be trawled in order
to identify patterns that can help to explain how consumers actually
behave, with much of this data being generated by loyalty cards.

Question 13

Market segmentation

Answer 13

Market segmentation
means discovering useful
ways to split up a market
into different groups of
consumers who share
similar characteristics and
needs.

Question 14

Why Segment markets

Answer 14

Splitting markets up helps to target specific groups
of consumers who share similar needs and wants, enabling a firm to meet
these more closely. Market research can unearth insights that allow firms
to identify segments that they can fulfil profitably.

Question 15

Benefits of segmenting a market include:

Answer 15

Products and services can be designed to suit specific customers.
• Meeting customers’ needs precisely allows a higher price to be charged.
• Promotional activity is easier to target.

Question 16

Test marketing Primary Market Research

Answer 16

This involves selling a new product in a small section of the market in order to assess customer reaction. For example, a start-up could start by selling to a limited local area in order to iron-out product issues. Software firms often test-market their products by offering “beta” versions for testing by a small group of potential customers. Test marketing can be a good predictor of how a new product or service will be received by the larger market (provided that it can be kept secret from competitors!)