3: Market Research

Question 1

Market Research (2)

Answer 1

• Process of gathering information about consumers,
• Competitors and distributors within a firm’s target market

Question 2

Problem with product-orientated approach (7)

Answer 2

• Doesn’t anticipate customers’ changing needs
• So the market may evolve and leave you behind
• Leading to lower market share
• And potential cash flow issues
• As sales plummet
• And fixed costs remain high
• E.g. Sony Walkman vs iPod

Question 3

Problem with market-orientated approach (5)

Answer 3

• Can lose focus on the quality and reliability of the product
• And focus on marketing gimmics instead
• In the long run, the business may be associated with poor quality
• So may find it hard to achieve distribution in up-market retail chains
• Reducing potential sales channels

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Question 4

Methods of secondary data (3)

Answer 4

• Internet (Google it)
• Trade press (Info on a particular market)
• Government-produced data (Census data)

Question 5

Methods of primary data (3)

Answer 5

• Observation
• Questionnaires
• Focus groups

Question 6

Bias (1)

Answer 6

• A factor that causes research findings to be unrepresentative of the whole population

Question 7

Sample size (2)

Answer 7

• The number of people interviewed
• M|ust be large enough to be representative

Question 8

Primary Research (3)

Answer 8

• Gathering information first hand
• E.g. questionnaires
• • Information is tailored to specific needs

Question 9

Secondary Research (3)

Answer 9

• Finding out info that has already been gathered
• E.g. census data
• Information isn’t tailored to specific needs

Question 10

Methods of Qualitative research and reason for doing it (3)

Answer 10

• Focus groups
• Depth interviews
• In-depth answers about buying habits and motivation
• Therefore better understanding of market
• So can adapt 4Ps
• Meaning strong brand loyalty as consumers needs are met
• Resulting in repeat purchases
• = High sales

Question 11

Advantages/Disadvantages of Focus Groups (3)

Answer 11

(+) May reveal a problem/opportunity the company hadn’t anticipated

(+) Reveals consumer psychology

(-) May be swayed by one influential person

Question 12

Limitations of market research (3)

Answer 12

• Sample bias
• Sample size
• Very high cost to get valid data