chapter 11 - market research

Question 1

describe market-orientated business (2)

Answer 1

• It requires businesses to have a marketing budget.
• Market-orientated businesses are better able to survive in the market and be successful because they are usually more adaptable to changes in customer tastes.

Question 2

what does market research find out (2)

Answer 2

• Quantitative information – which answers the questions about the quantity of something (“how many”, “what percentage”, etc.).
• Qualitative information – which answers questions where an opinion or judgement is necessary (“what do”, “why do”, etc.).

Question 3

what are the different types of market research? (2)

Answer 3

primary research
secondary research

Question 4

advantages of primary research (4)

Answer 4

• It is up to date and relevant to the business undertaking it.
• It is usually planned and carried out by the people who want to use the data; it is first-hand.
• It is most effective when it is used to gather information which will help the business with a specific problem.
• It is not available to other businesses.

Question 5

disadvantages of primary research (2)

Answer 5

• It can be expensive (individually interviewing many people).
• It is not available immediately – it takes time to collect.

Question 6

what are the different types of primary market research methods? (4)

Answer 6

questionnaires
online surveys
interviews
focus group

Question 7

advantages of questionnaires (4)

Answer 7

 Detailed qualitative information can be gathered about the product or service
 Customers’ opinion about the product or service can be obtained
 They can be carried out online
 Vouchers can be offered to encourage people to fill in the questionnaire.

Question 8

disadvantages of questionnaires (3)

Answer 8

 If questions are not well thought out, the answers to them will not be very accurate
 Carrying out questionnaires can take a lot of time and money
 Collating and analysing the results is also time-consuming.

Question 9

advantages of online surveys (5)

Answer 9

 Fast, with quick response times
 Cheaper than interviews or postal questionnaires
 Easy than interviews or postal questionnaires
 Easy to complete for the participant
 Data collected can be quickly presented and analysed using IT tools.

Question 10

disadvantages of online surveys (3)

Answer 10

 Absence of the interviewer to explain open-ended questions or to ask follow-up questions
 Cannot reach potential respondents if they do not have access to the internet
 Scope of fraud.

Question 11

advantages of interviews (2)

Answer 11

 The interviewer is able to answer any questions received from the interviewee
 Detailed information can be gathered (customers’ preferences).

Question 12

disadvantages of interviews (2)

Answer 12

 The interviewer could lead the interviewee into answering in a certain way due to the interviewer’s bias
 Interviews are very time-consuming and are often expensive.

Question 13

advantages of focus group (3)

Answer 13

 They provide detailed info about consumers’ tastes and preferences
 Interaction between members of the group can help the business understand the reasons of others’ opinions
 Quicker and cheaper than individual interviews.

Question 14

disadvantages of focus group (3)

Answer 14

 They can be time-consuming if conducted by a specialist market research agency
 Discussion could be biased due to the influence of others’ opinions
 Can be dominated by just a few people so the researcher will need to be experienced to deal with this.

Question 15

different types of sampling (2)

Answer 15

random sample
quota sample

Question 16

advantages of secondary research (4)

Answer 16

 Often a much cheaper way of gathering information
 It can be used to help assess the total size of a market by finding out the size of the population and its age structure
 Newspaper may carry vital economic forecasts
 Usually is quicker to obtain secondary data.

Question 17

disadvantages of secondary research (3)

Answer 17

 Data may be out of date
 Data is available to all businesses
 Data may not be completely relevant as it was not collected with the needs of one business in mind.

Question 18

what are the internal sources of secondary data (4)

Answer 18

• A lot of information may be readily and cheaply available from the business’s own records. Ex:
• Sales department records, pricing data, customer records, sales reports.
• Finance department
• Customer service department

Question 19

what are the external sources of secondary data (6)

Answer 19

• This is when information is obtained from outside the business. ex:
• Government statistics about the population and its age structure
• Newspaper may have useful articles
• Trade association provides information for the business in that industry
• Market research agencies carry out research on behalf of companies or anyone who commissions them
• Online sources.

Question 20

factors influencing the accuracy of market research data (8)

Answer 20

• how carefully the sample was drawn up
• the way the questions are phrased
• the sample selected
• the size of the sample
• the wording of the questions
• who carried out the research
• bias
• age of the information.

Question 21

table/tally chart is used for what (3)

Answer 21

it is the most suitable method of presenting data when raw data is needed. however, it offers little more than that and the information should be converted into other forms if needs to be understood or analysed carefully. it is sufficient for info that is brief or does not contain a lot of different things.

Question 22

bar chart is used for what (2)

Answer 22

charts are more meaningful and attractive way to present data. they are normally used to compare two or more sets of stats with each other.

Question 23

pictogram is used for what (2)

Answer 23

it is similar to a bar cart but uses symbols instead of columns. it becomes extremely effective if the data is short and simple.

Question 24

pie chart is used for what (2)

Answer 24

pie charts are ways to show the proportion that each components take up compared to the total figure.

Question 25

line graph is used for what (2)

Answer 25

graphs show the relationship between two variables. it can be drawn in a straight or curved line. it is usually to compare things with time and to identify trends.