Chapter-11 Flashcards
Market research
What is market research?
The process of collecting, recording, and analysing data about customers, competitors, and the market for a product.
How does market research help a business?
1) Find out what consumers like and dislike about their products
2) Identify consumer tastes and preferences
3) Decide on the best promotion, packaging, and distribution methods
4) Identify main competitors and their unique selling points (USPs)
5) Know the size of the market
6) Explain the reason for the sales of current products
7) Predict how demand for products may change in the future
What information does market research provide to a business?
1) Its customers
2) Its competitors
3) Its market
What is market-orientated production?
Products are developed based on consumer demand, as identified by market research.
What is a unique selling point?
The special feature of a product that sets it apart from competitors’ products.
What are the benefits of a market-orientated approach?
1) The risk of new products failing is reduced because they are based on market research that identifies consumer needs.
2) Products that meet consumer needs are likely to last longer in the market, leading to higher sales and profits.
What is product-orientated production?
The firm decides what to produce and then tries to find buyers for the product.
What is primary research?
The collection of first-hand data for the specific needs of the firm.
How can market research information be used by a business?
1) Identify consumer needs, reducing the risk of new product development.
2) Discover the current and future market size for the product.
3) Provide information about the business’s existing products and markets.
4) Identify strengths and weaknesses of competitor products to improve new product development.
5) Decide on pricing, promotion, and distribution strategies for the product.
6) Predict how changes in consumer tastes and trends may affect future demand.
What is secondary research?
The collection of data from second-hand sources.
What are the advantages of pictograms?
Data is represented by pictures, which helps people who are less numerate.
What are the limitations of primary research?
1) It is costly to collect.
2) It is time-consuming.
3) There is a risk of inaccuracy or bias in the data.
4) The sample may not represent the whole population.
What are sources of secondary data?
1) Internet: Data and information on various topics, easily found through search engines and business websites.
2) Government publications: Official data such as population statistics, available through government websites.
3) Newspapers and magazines: Reports on the economy, industry-specific journals, and business sections.
4) Libraries: Public libraries offering free access to printed materials and sometimes internet access.
5) Market research agencies: Companies like RNB Research that collect and analyze market data for businesses.
6) Business records: Customer information and financial records kept by businesses for analysis and comparison.
What are the advantages of line graphs?
1) They clearly show trends.
2) Values can be read off from both axes.
3) Data can be added for future time periods.
What is quantitative research?
The collection of numerical data that can be analysed using statistical techniques.
What is a sample in market research?
A representative sample of the target market selected to take part in market research.
What are the limitations of secondary research?
1) It may not be up-to-date.
2) It may not be collected for the specific purpose required by the business.
3) It can be less reliable or useful than primary data.
What are the advantages of presenting data in a table?
1) Large amounts of data can be grouped and presented more clearly.
2) It is easy to extract numerical data.
What is qualitative research?
The collection of information about consumer buying behavior and their opinions about products.
What factors can affect the accuracy of market research data?
1) The sample chosen may be too small or not representative of the population.
2) The wrong method may have been used to collect the data.
3) Interviewees may not answer questions truthfully.
4) The language used by the interviewer or in questionnaires may be unclear.
5) Data may be recorded incorrectly, or numerical analysis may be done incorrectly.
6) Secondary data may be out-of-date.
7) Secondary data may have been collected for a different purpose.
How are market research results presented and analysed?
1) Qualitative research: Presented in written reports, helping managers decide on actions such as product design or packaging changes.
2) Quantitative research: Data is presented using tables, charts, graphs, and pictograms to make the numbers meaningful and usable.
What are the disadvantages of presenting data in a table?
1) Tables lack visual impact.
2) Too much data can make it difficult for users to understand.
What are the disadvantages of line graphs?
1) They can be difficult to draw.
2) Accuracy depends on choosing appropriate scales for both axes.
What are the disadvantages of a bar chart?
1) When data values are very similar, it is difficult to compare the parts.
2) The chart loses visual impact.
What are the advantages of a bar chart?
1) You can easily see the importance of each piece of data.
2) Numerical values can be read from the axis.
What are the advantages of a pie chart?
1) Shows how important each part of the data is compared to the other parts.
2) Easier to understand for people who dislike numerical values, as there are no numbers.
What are the disadvantages of a pie chart?
If there are too many ‘slices,’ it is difficult to see the relative importance of different parts of the data.
What are the disadvantages of pictograms?
It is difficult to show exact quantities using pictures.
