Chapter 16

Question 1

Describe the reasons why a business conducts market research (4)

Answer 1

• It can help establish a price point(desk research shows competitor prices)
• Highlight competitors strengths and weaknesses (online competitors product range, customer reviews)
• Establish size of different market segments (CSO shoes diff area + surveys show which demographic is most interested in ur product )
• Test marketing to see if there’s enough demand (focus groups)

Question 2

Explain 2 Advantages of Desk Research

Answer 2

-Fast Access
Secondary research is usually faster to complete than primary research. Lots of the information a business wants to gather may be available online having already been gathered. E.g. A business accessing CSO information or reports stored online.
-Cheaper
Secondary research is usually relatively inexpensive compared to primary research thereby keeping business costs down. Viewing data online e.g. press releases from competitors / competitor’s prices on their website, is free where as time and money needs to be invested to gather data e.g. survey.

Question 3

Define the term market segmentation

Answer 3

Market segmentation involves dividing up the market into clearly identifiable sections which have common characteristics. It allows a firm to identify who their target market is.

Question 4

Demographic segmentation explanation

Answer 4

• Demographic segmentation
  Analyses consumers according to age, gender, family size, income, occupation.
  E.g. Netflix developing tv series for different age groups.

Question 5

Explain behavioral segmentation

Answer 5

• Behavioral segmentation
  Analyses consumers according to their knowledge of and attitudes towards the use of or response to a product.
  E.g. Celebration packs of chocolates as seasonal treats (Easter/Christmas etc.)
  Psychological
  Analyses consumers according to social status, lifestyle and personality type.
  E.g. Fair Trade coffee for socially conscious consumers that would prefer to support Fair Trade and have it on their coffee cups.

Question 6

Geographic segmentation definition

Answer 6

• Geographic segmentation
  Analyses consumers according to location county/region/country, warm areas versus cold etc…
  e.g. Newspaper/Radio business offering different products/services for people in Leinster than people in Munster etc; Spin South West, Midlands
  103

Question 7

Psychological segmentation analysis

Answer 7

Psychological
Analyses consumers according to social status, lifestyle and personality type.
E.g. Fair Trade coffee for socially conscious consumers that would prefer to support Fair Trade and have it on their coffee cups.