chapter 11 - market research

Question 1

definition of:

market research

Answer 1

the process of gathering, analysing & interpreting info about a market

Question 2

role of market research

Answer 2

find out:

• whether customers would buy
• what price would they buy
• what type of product
• what type of promotion is effective
• who are the main competing business
• where would they buy
• who would buy
• what feature do customers like/ dislike
• how strong is the competition

Question 3

definition of:

product-oriented

Answer 3

business is one whose main focus of activity is on product itself; find out product first, find a market for it later

e.g. basic necessities

Question 4

definition of:

market-oriented

Answer 4

business carries our market research to find out consumer wants before a product is developed and produced; can take advantage of new market opportunities (new products launched with confidence)

e.g. business whose markets are international/ national, business who needs to have a marketing budget

Question 5

definition of:

marketing budget

Answer 5

a financial plan for the marketing of a product or product range for some specified period of time

Question 6

types of market research methods

Answer 6

• primary research

- secondary research

Question 7

definition of:

primary research

Answer 7

collection & collation of original data via direct contact with potential/ existing customers

Question 8

advantages of primary research

Answer 8

• up- to-date and relevant to business undertaking it
• planned and carried out by people who want to use the data; first hand
• effective when used to gather info that helps business with a specific problem
• unavailable to other business

Question 9

disadvantages of primary research

Answer 9

• can be expensive; interviewing

- not available immediately; takes time

Question 10

types of primary research

Answer 10

• focus group
• interviews
• online surveys
• questionnaire

Question 11

definition of:

questionnaire

Answer 11

a set of ques to be answered as a means of collecting data for market research

Question 12

definition of:

focus groups

Answer 12

a group of people who are representative of the target market

Question 13

definition of:

interviews

Answer 13

involve asking individuals a series of questions, face to face or over phone

Question 14

definition of:

online surveys

Answer 14

require the target sample to answer a series of ques over the internet

Question 15

advantages of questionnaire

Answer 15

• detailed qualitative info gathered
• can be carried out online
• vouchers offered to encourage people to participate
• obtain customer’s opinion

Question 16

disadvantages of questionnaire

Answer 16

• if ques not well thought, answ can be inaccurate and misleading
• takes lot of time & money collating and analysing

Question 17

advantages of online surveys

Answer 17

• quicker response
• cheap
• easy to complete for participants
• data collected can be quickly presented & analyses

Question 18

disadvantages of online surveys

Answer 18

• absence of interviewer to explain open- ended ques
• cannot reach potential respondents (don’t have access)
• scope for fraud (dishonesty, complete carelessly, gain incentives offered)

Question 19

advantages of interviews

Answer 19

• interviewer can explain ques not understood

- detailed infos gathered abt what customers like/ dislike

Question 20

disadvantages of interview

Answer 20

• interviewer can lead interviewee into answering certain way; inaccurate results due to interviewer bias
• time consuming and expensive

Question 21

advantages of focus groups

Answer 21

• provide detailed infos abt consumers taste and preferences
• interaction between members of group helps business understand the reasons for their opinions
• quick and cheap

Question 22

disadvantages of focus groups

Answer 22

-time consuming and expensive if carried out by a specialist market research
agency
-discussion can be bias
-can be dominated by just few people; researcher needs to be experienced

Question 23

definition of:

sample

Answer 23

group of people who’re selected to respond to a market research exercise

Question 24

definition of:

random sample

Answer 24

when people are selected at random as a source of info for market research

-everyone has even chance of being picked but not all are a consumer of the product investigated

Question 25

definition of:

quota sample

Answer 25

when people are selected on the basis of certain characteristic (income, age, gender) as a source of info for market research

Question 26

definition of:

secondary research

Answer 26

uses info that has alrd been collected and is available all for us by others

Question 27

advantages of secondary research

Answer 27

• cheaper way to gather info
• quicker than primary research
• help assess total size of a market (population and age structure)
• newspaper carry vital economic forecasts (when does recession happen?)

Question 28

limitations of secondary research

Answer 28

• data out of date
• data available to all business
• data may be irrelevant

Question 29

examples of internal source of data

Answer 29

• sales department records, pricing data, customer records, sales reports
• financial department
• customer service department
• opinions of distribution and public relations personnel

Question 30

examples of external source of data

Answer 30

• gov statistics (population size and structure)
• newspapers (general state of economy - customer spending pattern in future)
• trade association (provide information for business in that industry)
• market research agencies
• online sources