3.2 Market research Flashcards
Definition: Market Research
The process of gathering, analyzing, and interpreting data about consumers’ needs, preferences, and behavior in a market.
Definition: Product-Oriented Business
A business that focuses on producing the product first and then finding a market for it, often ignoring consumer needs and wants.
Definition: Market-Oriented Business
A business that conducts market research to understand consumers’ needs and wants before developing a product.
Meaning: Primary Research
The collection of original data directly from customers or potential customers, aimed at solving specific business problems.
Advantages of Primary Research
Provides up-to-date and specific data.
The data is directly relevant to the business’s needs.
The business controls the process, ensuring it is tailored to its specific goals.
Disadvantages of Primary Research
Can be expensive in terms of both time and money.
Data may not be immediately available.
Research may be limited by the size or type of the sample.
Process: Primary Research
Define the purpose of the research.
Choose the most suitable research method (e.g., questionnaire, interview).
Select the sample size and audience.
Collect the data.
Analyze the results.
Report findings.
Definition: Secondary Research
The process of gathering existing data that has already been collected and analyzed by others.
Advantages of Secondary Research
Lower cost compared to primary research.
Data is readily available, saving time.
Provides a broad understanding of trends, such as economic forecasts.
Disadvantages of Secondary Research
Data may not be specific or tailored to the business’s needs.
The data could be outdated or incorrect.
Other businesses may have access to the same information.
Definition: Sampling
The process of selecting a small group of individuals to represent a larger population for the purpose of research.
Advantages of Sampling
Cost-effective and less time-consuming than surveying an entire population.
Easier to manage and analyze.
Disadvantages of Sampling
The sample may not be fully representative of the entire population.
Sampling bias can occur if the sample is not selected randomly.
Definition: Random Sampling
A method where every individual in the population has an equal chance of being selected for the research.
Advantages of Random Sampling
Reduces bias, as every individual has an equal chance of selection.
Provides a broad representation of the population.
Disadvantages of Random Sampling
May result in unrepresentative samples if the sample size is too small.
May be expensive and time-consuming if the sample is large.
Definition: Quota Sampling
A method where participants are selected based on specific characteristics (e.g., age, gender) to ensure the sample represents certain subgroups of the population.
Advantages of Quota Sampling
Allows targeted insights into specific groups.
Provides detailed data on particular characteristics or demographics.
Disadvantages of Quota Sampling
May not represent the entire population accurately.
It can lead to bias if the quotas are not set correctly.
Definition: Focus Groups
A research method where a small group of people discusses a product, concept, or service to gather detailed opinions.
Advantages of Focus Groups
Provides in-depth, qualitative insights.
Can reveal the reasons behind consumer opinions.
Faster than individual interviews for collecting multiple opinions.
Disadvantages of Focus Groups
Can be expensive and time-consuming.
Group dynamics may cause some individuals to dominate the discussion, limiting diverse opinions.
Definition: Interviews (Primary Research)
One-on-one conversations between a researcher and a participant to gather detailed, qualitative information.
Advantages of Interviews
Enables detailed responses and clarifications.
Provides a deep understanding of an individual’s views.
Disadvantages of Interviews
Time-consuming and costly.
Interviewer bias may influence responses.
Definition: Observation (Primary Research)
A research method where the behavior of consumers is observed directly, such as how many people enter a store.
Advantages of Observation
Low-cost and easy to conduct.
Provides factual, real-time data.
Disadvantages of Observation
Does not provide insight into why consumers behave in a certain way.
Limited to simple data without further explanations.
Definition: Internal Secondary Data
Data that comes from within the business itself, such as sales reports, financial records, and customer feedback.
Advantages of Internal Secondary Data
Easily accessible and specific to the business.
Cost-effective as the data is already collected.
Disadvantages of Internal Secondary Data
May be outdated or incomplete.
May not be suitable for addressing new or specific research questions.
Definition: External Secondary Data
Data collected by outside sources, such as government statistics, trade associations, or market research agencies.
Advantages of External Secondary Data
Cost-effective and time-efficient.
Provides broad insights from reliable sources, such as government reports.
Disadvantages of External Secondary Data
May not be tailored to the business’s specific needs.
Can be outdated or inaccurate.
Process: Analyzing Market Research Data
Collect and organize data.
Display the data in charts, graphs, or tables.
Identify trends and patterns.
Draw conclusions based on the analysis.
