5: Conducting market research

Question 1

Market research

Answer 1

The process of gathering, analysing and interpreting data about the market.

Question 2

Primary market research

Answer 2

Data collected by the entrepreneur, or paid to be collected, which does not already exist.

Question 3

Secondary market research

Answer 3

Dad already in existence that has not been collected specifically for the purposes of the entrepreneur.

Question 4

Random Sample

Answer 4

One in which each potential member of a group has an equal chance of being in the sample.

Question 5

Quota Sample

Answer 5

The sample of a certain number of people is taken from one specific group of the population, for example, 100 females or 50 people aged between 18 & 30.

Question 6

Stratified sample

Answer 6

The population is divided into groups with common characteristics, for example, people earning over £100,000, and a sample is randomly selected from this group.

Question 7

Factors affecting choice of sample methods:

Answer 7

• AVAILABLE FINANCE. Start- up unlikely to have lawge amounts of capital available. MR in initial stages low cost.
• THE NATURE OF THE PRODUCT. An existing product or service will have already created secondary data in the form of information about competitors, their location, sales, etc. New, innovative ideas area less likely to have data already in existence.
• THE LEVEL OF RISK. The newer the product the greater the risk (and the greater the potential rewards!). Greater the risk the more important the need for research.
• THE TARGET MARKET. A clearly defined market, whether in terms of age, income or some other factor, is easier to target in terms of sample.

Question 8

Primary research methods:

Answer 8

• Observation. Sometimes, useful iso collected by watching people walking through a shop, or past a location.
• IT allows for more detailed accurate observation e.g. loyalty card schemes, CCTV & interactive websites.
• Written questionnaire. Large number can be contributed quickly.
• Face-to-face questionnaires. Benefit of follow up question
• Telephone & online surveys.
• Focus groups. Discussion of a product can revel info and opinions that might not be revealed by interviewing people individually.

Question 9

Quantitative Data

Answer 9

Data in NUMERICAL FORM. E.g. '8 out of 20 owners who expressed a preference said their cats preferred Whiskers.' Quantitative data is usually collected from larger scale research in oder to generate statistically reliable results.
- questionnaire
- telephone surveys
- online surveys
WHAT rather than WHY.

Question 10

Qualitative Data

Answer 10

Data about opinions, attitudes and feelings. It is usually expressed in terms of why people feel or behave they way they do.

• in-depth interviews.
• group discussions, such as focus groups.