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AQA A Level Business > 3.3.2 > Flashcards

3.3.2 Flashcards

1
Q

what is market research

A

involves gathering and analysing qualitative and quantitative market data. Market research is the key indicator of customer needs, which drives decision making across all business functions, not just marketing.

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2
Q

market research process

A

define problem /question
develop market research plan
collect data
analyse data
interpret and report findings

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3
Q

advantages of primary market research

A
  • specific to the needs of the business
  • more up to date and reliable - gives more opportunity for two-way communication and follow up questions
  • often better if you want to collect qualitative data
  • sampling provides an insight into the market, but saves money as the whole population is not needed; a sample must be representative, unbiased and large enough to represent the whole market
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4
Q

disadvantages of primary market research

A
  • can be more time-consuming and therefore more costly
  • difficult to conduct a large sample size.
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5
Q

examples of primary market research

A

questionnaires, consumer panels, interviews, focus groups and customer observations

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6
Q

what is primary market research

A

research collected first hand

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7
Q

what is secondary market research

A

research that already exists conducted by another organisation

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8
Q

advantages of secondary market research

A
  • easily accessible and a good starting point
  • fast and less time-consuming
  • often better if you want to collect quantitative data
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9
Q

disadvantages of secondary market research

A
  • some data can be free but detailed reports can be expensive to purchase
  • not always up to date or specifically tailored to the business’s needs
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10
Q

examples of secondary market research

A

market research reports, competitors, websites, government statistics and newspaper articles.

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11
Q

what is market mapping

A

a technique used to understand how products/businesses are viewed relative to competitors based on two relevant characteristics.

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12
Q

why is market mapping useful

A
  • helps businesses decide whether to set up in a market
  • a useful process for comparing similarities and differences between businesses - market positioning
  • helps a business gain a better understanding of its competition
  • useful as a market research tool to gain an understanding of customer perceptions.
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13
Q

a limitation of market mapping

A

it only considers two main variables - markets and customer perceptions are often very complex.

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14
Q

what is correlation

A

Correlation helps businesses understand the relationship between two factors. If a business can understand the key factors determining demand for its products, then it can manipulate them to achieve greater sales.

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15
Q

positive correlation

A

+0.9
customer satisfaction

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16
Q

negative correlation

A

-0.8
price

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17
Q

no correlation

A

0
value between -1 and +1

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18
Q

what is sampling

A

Sampling involves selecting a representative group of people from the target population.

19
Q

advantages of sampling

A

It is quicker and easier than trying to collect research from everyone
- this is often impossible
The bigger the sample size, the more representative it will be.

20
Q

The sample size and the method of conducting the research will determine

A

accuracy and reliability

21
Q

Anything less than the whole population cannot be

A

100% accurate

22
Q

what is a confidence interval

A

an indication of how accurate the research findings are, for example 80% = 80% confidence that the results are accurate.

23
Q

what is a confidence interval

A

the possible range of outcomes for a given confidence. As the interval narrows the confidence level will fall.

24
Q

what does extrapolation mean

A

Extrapolation means predicting future trends, for example sales trends based on past results.

25
Q

is extrapolation reliable

A

Extrapolation is reliable when conditions remain the same.

26
Q

The further into the future we extrapolate

A

the less confidence we have in the certainty of the prediction.

27
Q

factors influencing elasticity

A

number of substitutes/competitors
relative effort/costs of switching to another
product
extent to which the product is considered a necessity
perceived value of the brand.

28
Q

what is price elasticity

A

effect of a change in price on the quantity demanded.

29
Q

what is income elasticity

A

effect of a change in consumer income on the quantity demanded.

30
Q

price/income elastic - pricer increase

A

Leads to a bigger
percentage decrease in demand.
Revenues fall.

31
Q

price/income elastic - price decrease

A

Leads to a bigger percentage increase in demand.
Revenues rise.

32
Q

price/income inelastic - price increase

A

Leads to a smaller percentage decrease in demand.
Revenues rise.

33
Q

price/income inelastic - price decrease

A

Leads to a smaller percentage increase in demand.
Revenues fall.

34
Q

when do you ignore the negative

A

when calculating PED. Just focus on the decimal number. An inelastic PED means price has little impact on demand - not that demand will not change at all.

35
Q

PED

A

-ve correlation
always negative
-4 = elastic - qty demanded greater than change in price - sensitive
inelastic = -0.2 less than 1
qty demanded smaller than change in price - not very sensitive

36
Q

elastic - opposite

A

increase price decreases revenue
decrease price increase revenue

37
Q

inelastic - same

A

increase price and increase revenue
decrease price and decrease revenue

38
Q

use PED

A

staffing
stock control
international sales - SPICED
cash flow/income forecast increase accuracy
exports dear

39
Q

inelastic

A

brand loyalty
fewer rivals
cheap product
someone else paying
limited time to consider

40
Q

YED

A

positive - +2
0-1 = normal good
more than 1 = luxury
higher YED = increase responsiveness
negative correlation = -2
less than 0 = inferior
reduce inventory
reduce workforce
decrease cash flow

41
Q

market size =

A

Expressed in terms of units sold or value (£)

42
Q

market share =

A

total company sales/total market sales x100

43
Q

market and sales growth =

A

increase in market size/sales (the difference)/original size/sales

44
Q

uses of market research

A

product development
budgeting
production forecast
sales forecasting
developing marketing activities - such as promotional campaigns
workforce forecast
cash flow forecasting

AQA A Level Business (34 decks)

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