Chapter 15 (market research)

Question 1

What is Market research?

Answer 1

Market research is the process of collecting, recording and analysing data about the customers, competitors and the market

Question 2

why is market research important to the business?

Answer 2

1 It helps reduce the risks associated with new product launches
2 It assists predicting future demand changes
3 It helps explain patterns in sales of existing products and market trends
4 It helps to assess the most favoured designs, flavours, styles, promotions and packages for a product

Question 3

what are some of the Management problem that could be identified?

Answer 3

1 What size is the potential market for this business?
2 Why are our sales falling?
3 How can we break into the market in another country?
4 How can we most effectively meet the challenge of new competitors?
5 What customer groups buy our products and which groups tend not to buy them?

Question 4

examples Research objectives?

Answer 4

1 How many people are likely to buy our products in country X?
2 If the price of good Y is reduced, how much will this increase sales volume?
3 If we advertise this product on television, what will be the likely impact on sales volume and market share?
4 Which new product idea, A or B, is likely to generate more sales?
5 What would be the impact of new packaging on sales of our product?
6 Why are consumer complaints about our products increasing?

Question 5

what is Primary research

Answer 5

Primary research is the collection of first-hand data that is directly related to a firm’s needs

Question 6

what is Secondary research

Answer 6

Secondary research is the collection of data from second-hand sources

Question 7

Sources of secondary data?

Answer 7

1 Government publications
2 Local libraries and local government offices
3 Trade organisations
4 Market intelligence reports
5 Newspaper reports and specialist publications
6 Internal company reports
7 The internet

Question 8

Secondary research Advantages

Answer 8

1 Often obtained very cheaply – apart from the purchase of market intelligence reports
2 Obtainable quickly without the need to devise complicated data-gathering methods

Question 9

Secondary research Disadvantages

Answer 9

1 May not be updated frequently and may therefore be out-of-date
2 might not be available for completely new product developments

Question 10

what can primary research be divided into?

Answer 10

1 Qualitative research

2 Quantitative research

Question 11

what is Qualitative research

Answer 11

Qualitative research is research into the in-depth motivations behind consumer buying behaviour or opinions

Question 12

what is Quantitative research

Answer 12

Quantitative research is research that leads to numerical results that can be statistically analysed

Question 13

Qualitative research techniques : Focus groups

Answer 13

Focus groups – a focus group is a group of people who are asked about their attitude towards a product, service, advertisement or new style of packaging

Question 14

Quantitative research techniques: Observing and recording

Answer 14

Observing and recording - Using this approach, market researchers observe and record how consumers behave

Question 15

Qualitative research techniques: Test marketing

Answer 15

This can take place after a decision has been made to produce a limited quantity of a new product but before a full-scale, national launch is made

Question 16

Qualitative research techniques:

Answer 16

These involve directly asking consumers or potential consumers for their opinions and preferences. They can be used to obtain both qualitative and quantitative research.

Question 17

what is a Sample size?

Answer 17

A sample is the group of people taking part in a market research survey selected to be representative of the overall target market

Question 18

what are some Sampling methods?

Answer 18

Random sampling
Stratified sampling
Quota sampling

Question 19

what is Random sampling

Answer 19

Random sampling occurs when every member of the target population has an equal chance of being selected

Question 20

what is Stratified sampling

Answer 20

Stratified sampling draws a sample from a specified sub-group or segment of the population and uses random sampling to select an appropriate number of each stratum

Question 21

What is Quota sampling ?

Answer 21

Quota sampling occurs when the population has been stratified and the interviewer selects an appropriate number of respondents from each stratum

Question 22

What are the main reasons behind primary research not being accurate?

Answer 22

Sampling bias
Questionnaire bias
Other forms of bias

Question 23

what is Sampling bias?

Answer 23

results from a sample may be different from those that would have been obtained if the entire population had been questioned

Question 24

What is Questionnaire bias?

Answer 24

this may occur when questions tend to lead respondents towards one particular answer

Question 25

what are Other forms of bias?

Answer 25

these might include the respondent not answering in a very truthful way