5.3 - purpose and method of market research

Question 1

market research

Answer 1

The process of gathering, analysing and processing data relevant to marketing decisions.

Question 2

market segment

Answer 2

A group of similar needs within the overall market

Question 3

segmentation

Answer 3

Occurs when a market is divided into different groups of needs and wants.

Question 4

primary market research

Answer 4

(Also called ‘field research’), which involves gathering information for the first time.

Question 5

secondary market research

Answer 5

(Also called ‘desk research’), which involves using data that already exists.

Question 6

whats the purpose of market research?

Answer 6

gather information about the competitors, customers and their products to understand how to make and market products that will sell and make a profit.

Question 7

Market research gathers information on - demand

Answer 7

such as size and growth of the market and the different segments in it

Question 8

Market research gathers information on - market share

Answer 8

such as the sales of each producer as a percentage of total sales in the market

Question 9

Market research gathers information on - competition

Answer 9

such number as the size and number of competitors

Question 10

Market research gathers information on - target market

Answer 10

as the business is likely to only want to focus on part of the market with similar needs and wants, known as a market segment.

Question 11

Quantitative data

Answer 11

involves the use of numbers such as the size of market, the growth of the market or number of customers a business has.

Question 12

Qualitative data

Answer 12

involves opinions and views but does not provide statistically reliable information.

Question 13

market size equation

Answer 13

volume of sales = number of units sold × price per unit

Question 14

market growth equation

Answer 14

Market growth = change in market size over original market share x 100

Question 15

market share equation

Answer 15

Market share = sales of product over total market sales x 100

Question 16

secondary market research advantages -2

Answer 16

-gathered quickly and
cheaply — data has already been gathered
-provide information on large parts of the population

Question 17

secondary market research disadvantages -2

Answer 17

-existing data may not be exactly
what the business wants,
-The existing data may also be out of date which

Question 18

primary market research advantages -2

Answer 18

-tailored to meet the business needs
-is up to date

Question 19

primary market research disadvantages -2

Answer 19

-must be done correctly or else results will be misleading.
-more expensive to gather

Question 20

ways primary research can be gathered -3

Answer 20

-observing —shoppers habits
-experimenting —offering some customers a trial of a new product and gathering feedback.
-Surveying

Question 21

Forms of surveys -5

Answer 21

-Telephone surveys
-Questionnaires
-Customer/supplier feedback
-Focus groups
- door to door

Question 22

door - to - door advantages -1+ disadvantages -1

Answer 22

ad:Can see how people react
dis:Can be time consuming

Question 23

Telephone - survey advantages -1+ disadvantages -2

Answer 23

ad:Can call when it is convenient to the business
dis: -Cannot see how people respond
-People may not answer their phones or be reluctant to give answers

Question 24

focus groups advantages -1+ disadvantages -1

Answer 24

ad:Can get in-depth responses
dis:Small groups may not reflect all your target customers

Question 25

internet research advantages -1+ disadvantages -1

Answer 25

ad:Cheap, quick
dis:May not find the views of your target customers