market research

Question 1

Market research

Answer 1

this is the process of collecting, recording and analysing data about customers, competitors and the market.

Question 2

why we need market research

Answer 2

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

Question 3

The market research process

Answer 3

1 Management problem identification (e.g why are sales falling)
2 Research objectives (Which new product idea, A or B, is likely to generate more sales?)
3 Sources of data − primary and secondary research

Question 4

primary and secondary research

Answer 4

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

Secondary research: collection of data from secondhand sources.

Question 5

Sources of secondary data

Answer 5

1 Government publications( e.g population sensus)

2 Local libraries and local government offices

6 Internal company records (e.g customer sales records)

The Internet

Question 6

Advantages and disadvantages of secondary research

Answer 6

Advantages
■ often obtainable very cheaply – apart from the purchase of market intelligence reports
■ identifies the nature of the market and assists with the planning of primary research
■ obtainable quickly without the need to devise complicated data-gathering methods

disadvantages
■ data-collection methods and accuracy of these may be unknown
■ might not be available for completely new product developments
■ may not be updated frequently and may therefore be out-of-date

Question 7

Methods of primary research (quantitative data)

Answer 7

1 Observation and recording
2 Test marketing
3 Consumer surveys

Question 8

Methods of primary research (qualitative data)

Answer 8

focus groups

Question 9

sampling techniques

Answer 9

■ Systematic sampling
■ Stratified sampling
■ Quota sampling
■ Simple random sampling

Question 10

why primary data may not be reliable

Answer 10

1 Sampling bias

2 Questionnaire bias

Question 11

how to interpret data

Answer 11

■ Tables
■ Pie graphs (how to calculate each section) value of one section divided by total value of all sections
degree× 360
■ Line graphs

Question 12

advantages of primary data

Answer 12

disadvantages
takes time to gather

can be expensive compared to desk research

advantages
information is relevant