4.4 Market Research

Question 1

What is the definition of “Market research”?

Answer 1

“Market research is the process of collecting primary and secondary data and information in order to gain an insight and understanding of the structure of the market and the needs of customers”.

Question 2

What are some of the purposes of market research?

Answer 2

• It provides up to date and accurate information about the market
• It shows whether current products are meeting the needs of customers
• It allows the business to improve their marketing strategies through segmentation
• Assessing customer reactions to new products
• Provide information about competitors’ marketing strategies
• Helps make predictions about the future

Question 3

What are some of the limitations of market research?

Answer 3

• Data can be unreliable and inaccurate due to bias
• The cost of thorough market research is very high
• Findings are only as good as the methods used in finding them

Question 4

What is the difference between primary and secondary research?

Answer 4

Primary research is conducted yourself, eg. an interview.

Secondary research is research that has already been gathered and published by others, eg. data on internet

Question 5

What are some examples of primary research?

Answer 5

• Focus groups (smaller sample of people)
• Interview
• Observations
• Questionnaire
• Test marketing

Question 6

What are some examples of secondary research?

Answer 6

• Data collection through internet
• Archives
• Organisational reports

Question 7

What is qualitative research?

Answer 7

Research of consumer behaviours

Question 8

What is quantitative research?

Answer 8

Numbers, statistics..

Question 9

What are some advantages of primary research?

Answer 9

• Data is specifically relevant to the business’ situation
• Up-to-date information
• Information is confidential (from competitors) and unique

Question 10

What are some disadvantages of primary research?

Answer 10

• Costly to carry out
• Time consuming to collect
• Questionable validity due to possible bias
• Responses inaccurate/ responders lie
• Very difficult to write questions

Question 11

What are some advantages of secondary research?

Answer 11

• Very easy to access
• Carried about by experts
• Cheaper and faster

Question 12

What are some disadvantages of secondary research?

Answer 12

• Not necessarily specific to the business
• Information can be accessed by anyone
• Data could be out of date

Question 13

What are the methods of sampling?

Answer 13

1. Quota
2. Random
3. Stratified
4. Cluster
5. Snowballing
6. Convenience

Question 14

What is “quota” sampling?

Answer 14

Respondents are grouped according to shared characteristics such as their age, gender or occupation. A certain number of people (quota) from each segment is then selected to be part of the sample.

Question 15

What is “random” sampling?

Answer 15

Respondents are randomly chosen to be part of the sample. Every person in the population has the same chance of being chosen.

Question 16

What is “stratified” sampling?

Answer 16

The population is divided into segments (called strata) that share similar characteristics such as their age, gender of occupation. The number chosen from each stratum is proportional to the population as a whole (whereas quota sampling is not).

Question 17

What is “cluster” sampling?

Answer 17

Several geographical areas (clusters) are chosen and people from within each of those chosen clusters are randomly interviewed.

Question 18

What is “snowballing” sampling?

Answer 18

Interviews are carried out with individuals who then suggest other friends, family or colleagues to increase the sample.

Question 19

What is “convenience” sampling?

Answer 19

A convenience sample is one of the main types of non-probability sampling methods. A convenience sample is made up of people who are easy to reach. Consider the following examples, “A pollster interviews shoppers at a local mall”.

Question 20

What are some limitations of sampling?

Answer 20

1. Human errors
   Those cause by human error or behaviour (untruthful answers)
2. Sampling errors
   Those caused by problems with the design of the sample (sample is too small to be representative)