Customer Needs - Identifying customer needs Flashcards
Explain what is meant by market research?
a systematic, objective collection and analysis of data about a particular target market
What is the purpose of market research?
- describe the market
- explain the market
- predict changes
- investigate future consumers
Distinguish between primary and secondary research?
Primary = carried out by the business first hand
Secondary = already done by someone else
What are primary (field) research techniques?
- interviews
- surveys/questionnaires
- observation
- consumer panels
- focus groups
- trial marketing
What are the overall advantages of primary research?
- directly focused to research business objectives = fit for purpose
- up-to-date
- more detailed insights into customer needs
What are the overall disadvantages of primary research?
- time-consuming
- expensive
- only available for larger businesses
What are the INTERNAL secondary market research techniques?
- sales data
- previous surveys
- customer info
- company reports
What are the EXTERNAL secondary market research techniques?
- market research companies
- internet
- trade publications
- newspapers/magazines
- competitors
- gov statistics (census data)
What are the overall advantages of secondary research?
- cheap and easy to obtain
- good source of marketing insights
- quick to access and use
What are the overall disadvantages of secondary research?
- quickly out-of-date
- not tailored to research needs
- specialist reports = expensive
Explain what is meant by sampling?
Getting opinions from a number of people in order to find out about the whole group
What are the 6 types of sampling?
- simple random
- systematic
- quota
- stratified
- convenience
- cluster
What are the advantages and disadvantages of simple random sampling?
+ everyone has an equal chance of being chosen
- sample might not be representative of sub-groups
What is systematic sampling?
every ‘nth’ individual from the list is selected from a randomly selected starting point
What are the advantages and disadvantages of systematic sampling?
+ useful is people are on a spreadsheet
- not equal chances
- arrangement of elements on the list could compromise representativeness
What is Quota sampling?
Splitting the population into subgroups according to their distribution in the population and the interviewer than chooses people
What are the advantages and disadvantages of quota sampling?
+ accounts for sub-groups
- selection bias
What is stratified sampling?
population is divided into subgroups or samples and a random sample is conducted within each group
What are the advantages and disadvantages of stratified sampling?
+ accurate results for entire population and no bias
- time-consuming process
What is convenience sampling?
using people who come to hand easily/first
What are the advantages and disadvantages of convenience sampling?
+ quick and easy
- bias
- unrepresentative
what is cluster sampling?
randomly selecting subgroups of the population
What are the advantages and disadvantages of cluster sampling?
+ easy when no list is available
+ equivalent results to simple
- sample may not be representative of population
What are the reasons for non-sampling errors?
- responder gives an answer they think will please interviewee
- respondent is in a hurry, first answer that comes to mind
- deliberate false answers could be given e.g. voting
What is a sampling error?
difference between the mean of the value of the sample and the actual or true mean value of the population
As sample size increases, sampling error falls
What is normal distribution?
a type of data that looks at the distribution of research and looks like a bell curve
What is meant by standard deviation?
measure of how spread out the numbers in a data set are and how they differ from the average
How to calculate standard deviation?
- find the mean
- for each data point, find the square of its distance to the mean
- sum values up from step 2
- divide by number of data points
- take the square root
Evaluate standard deviation?
shows how far away from the mean any results may be
Explain what is meant by market share?
the percentage of total sales within a market that is controlled by a business
How to calculate market share?
(sales value of business/sales value of whole market) x 100
What is market growth?
the increase in the overall size of a market in a percentage
How to calculate market growth?
(Difference/original)x100
What is market growth affected by?
- nature of product
- changes in fashion/taste
- population changes
- standard of living
