1.3.5 Understanding the consumer

Question 1

What is primary research?

Answer 1

When a business will carry out research in the form of questionairres, emails e.t.c to gather information from a target audience

Question 2

Advantages of primary research

Answer 2

Gives fairly up-to-date information about target market which business can then use to help meet needs of target audience

Question 3

Disadvantages of primary research

Answer 3

takes a lot of time and is expensive. Validity of the answers may depend on the mood of interviewee and might not represent the opinion of the whole population.

Question 4

What is secondary research?

Answer 4

When businesses use data/research which prexists already.

Question 5

Advantages of secondary research

Answer 5

Cheap and gives data as a representative of the whole market rather than a specific target audience. Can allow the business to examine trend sin the market.

Question 6

Disadvantages of secondary research?

Answer 6

Could be out of date and is likely to be available to competitors.

Question 7

What is market segmentation?

Answer 7

This is when a business splits up the market categorizing similar consumers depending on how they behave according to certain factors.

Question 8

How may a market be segmented

Answer 8

• Demographic segmentation (splitting the market by income, age, family and size)
• Geographic segmentation (splitting the market and consumers by geographic area e.g country or town)
• Behavioural segmentation (how consumers behave and react towards certain products and trends through brand loyalty or price sensitivity)
• Physcographic segmentation (analysing customers according to their lifestyle and attitudes.)

Question 9

Advantages of market segmentation

Answer 9

Helps provide a focus on efficient allocation of resources through knowing how the consumers will react to certain market chanes.
Helps the bussiness supply and fulfill the wants and needs of their consumers.

Question 10

Disadvantages of market segmentation

Answer 10

Can be very expensive and market segmentation requires very accurate info and market research so its vital the busniess accurately collates data and identifies segments correctly.