Market Research

Question 1

Two types of market research

Answer 1

Primary and secondary

Question 2

What’s primary market research

Answer 2

Where a business gathers new data

Question 3

What’s secondary market research

Answer 3

Involves using data that’s available

Question 4

Ways of collecting primary market research

Answer 4

1) Questionnaires, observations, interviews, focus groups
2) test marketing- which is where a business launches a product in a region and measure sales and response before launching to whole country
3) sampling

Question 5

Benefits of primary market research

Answer 5

• Primary data is needed to find out consumers opinions on a new product or advert
• Primary data is specific to purpose it’s needed for
• Its exclusive to the business who researched it, competitors cannot benefit from it

Question 6

Drawbacks of primary market research

Answer 6

• It is labour-intensive
• Expensive
• Slow

Question 7

Ways of collecting secondary market research

Answer 7

• Government publications
• Internet sources
• Trade magazines
• Market reports

Question 8

Benefits of Secondary market research

Answer 8

• Easier
• Faster
• Cheaper than primary market research

Question 9

Drawbacks of secondary market research

Answer 9

• May be unsuitable

- May have errors or out of date

Question 10

Why might secondary research be used

Answer 10

To get an initial understanding of a market.

Firm may then carry out specific primary research to investigate problems in the secondary research

Question 11

Why are samples of people used rather than whole market

Answer 11

Keeps costs down and saves time and resources

Question 12

What makes a sample representative

Answer 12

Having similar proportions of people in terms of age, gender, income etc.

Question 13

Why’s a representative sample important

Answer 13

More likely to give accurate results

Question 14

A big or a small sample is better

Answer 14

Bigger sample as it’s more likely it’ll be representative, however a big sample won’t necessarily be 100% accurate. There’ll always be a margin of error

Question 15

What does the size of the sample depend on

How will this affect the sample

Answer 15

• How many people a firm can afford to ask.

- Money is limited, risk of results being inaccurate increases

Question 16

Would a new business launching a new product in a niche market prioritise accuracy or cost

Answer 16

• A new business launching a new product in a niche market is risky. It will benefit from accurate research to find out what consumers really want.
• So may prioritise accuracy over cost

Question 17

Would a business launching a product in a competitive market prioritise accuracy or cost

Answer 17

• Products in a competitive market are similar, therefore is likely to prioritise cost over accuracy.
• It might not need to spend much on market research as it’s already clear that the product is in demand

Question 18

How else do researchers increase accuracy other than a representative sample

Answer 18

Avoiding bias

Question 19

What should questionnaires, surveys and interviews avoid

Answer 19

Biased questions

Question 20

How can interviewer bias be caused during an interview

Answer 20

By the personality of the interviewer, their opinions can influence the interviewee

Question 21

How can respondent bias be caused during an interview

Answer 21

• Respondents can give biased answers, which is when the response isn’t the true answer, often because they don’t think their true answers are socially acceptable

Question 22

How’s technology useful to support market research

Answer 22

• Makes market research easier, cheaper and quicker
• Can be used to get a lot more information than traditional research methods
• Easier to reach a wider sample

Question 23

Three examples of ICT that firms can use for market research

Answer 23

• Websites
• Social networking
• Databases

Question 24

How can businesses use websites for market research

Answer 24

Using the website to conduct short surveys or by analysing the activities of people using the site

E.g. what times of day/year the website is used most
What visitors are clicking on most
How likely they’re to spend money

Question 25

State a limitation of using websites for market research

Answer 25

Business might discover many people visiting its site don’t end up buying products, but won’t know why

Question 26

How else can businesses carry out market research, instead of looking at their own

Answer 26

• Looking at competitor websites to gather info on their new products, prices etc.

Question 27

Another way carrying out market research from their website

Answer 27

A Business can read their reviews about products.

However consumers are more likely to write a review on bad experiences rather than good therefore may not be representative

Question 28

What is social networking

Answer 28

Use of internet-based platforms to make connections with people

E.g. Facebook, Twitter

Question 29

How can you carry out market research through social networking

Answer 29

Firms can post content and monitor responses, may find out about people’s opinions on their products and competitors products

This is cheap and quick

Question 30

How else is social networking good for consumer preferences

Answer 30

Social networks can track trends

Question 31

Limitation of social networks

Answer 31

Not all consumers use the same social networks. Therefore market research could produce different results

E.g. fewer older people use Twitter and Facebook

Question 32

Why are business databases useful

Answer 32

They collect their own data about their products and consumers

E.g. supermarkets offer loyalty cards, allowing supermarkets to firm a database of customer names and addresses, and also their preferences based on what they buy

Question 33

How can you use databases as a source of secondary research

Answer 33

Firms can use other databases , which can be accessed online for a fee.

• Provides info about trends, businesses and consumers in a particular market.

Question 34

Benefit and limitation of using databases as secondary research

Answer 34

• Benefit= Theyre quick and cheap source of information

- Drawbacks= Data is mostly quantitative, therefore doesn’t give much info on consumer opinions about the product

Question 35

What is market segmentation

Answer 35

Dividing a market into groups of buyers

Consumers in each segment share one or more characteristic. E.g. age, income, hobbies etc

Question 36

How does market research help segment a market

Answer 36

It reveals more about the types of consumers in the market

Question 37

Why’s market segmentation help

Answer 37

Each segment of consumers has different wants and needs, so requires a different marketing mix.

Segmenting a market allows businesses to target their marketing towards specific groups of buyers

Question 38

How can market segmentation help produce new products

Answer 38

Identifies segments of a market who’s needs and wants aren’t being met

Question 39

4 ways to segment a market

Answer 39

Demographic segments

Geographic segments

Income segments

Behavioural segments

Question 40

Give examples of demographic segments

Answer 40

• Age, E.g. Saga holidays aimed at over 50’s
• Gender, E.g. Yoghurts mainly marketed towards women
• Socio-economic class, E.g. modern, one bedroom flats marketed at young professionals

Question 41

Give examples of geographic segments

Answer 41

Market divided into neighbourhood, city, county, country

E.g. Asia, method mostly used by multinational companies as customers have range of cultures and need different marketing mixes

Question 42

Give examples of income segments

Answer 42

Chanel makeup aimed at high income customers

Superdrug’s makeup aimed at lower income customers

Question 43

Give examples of behavioural segments

Answer 43

• Amount of use, E.g. phone suppliers market differently to heavy users and light users
• Lifestyle, E.g. busy, young workers may use lots of microwave meals
• Hobbies and interests, E.g. High protein snacks may be marketed towards athletes