Market Research 1.2 Flashcards by Molly Parkin

What is market research?

The process of gathering information about the market and customers needs and wants in order to help inform business decisions.

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What does the research normally focus on?

The market
Their competitors
Their customers

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What is primary research?

Finding out information for a specific purpose.

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What is secondary research?

Using information that already exists that has been carried out previously for another purpose.

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What is a questionnaire?

A list of relevant questions. It can be used for market research and customers.

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How can questionnaires be carried out?

Online - emails, website, over the phone.

Handed out physically - in town, shops, events

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What are the advantages of questionnaires?

Gain knowledge from the customers - likes, dislikes, ages, willingness (GATHER DATA)
Easy to analyse
Can be quick and cheap when done on a small scale.
Up to date information

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What are the disadvantages of questionnaires?

Can be difficult to get participants - may all be the same age. 
Takes up time and money
People don’t like to answer them
People lie (biased result)
Can’t gain detailed information.

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What is a focus group?

A small group of people who are put together to discuss their views, opinions, beliefs and attitudes towards a product, service, advertisement or idea.

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What are the advantages of a focus group?

Detailed opinions
Comparing the products
The interviewer doesn’t bias the answers
Up to date information
If carried our online, it can be cheap

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What are the disadvantages of a focus group?

People don’t get involved - one person usually takes the lead
Not as many opinions
Can be expensive if done face to face

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What are observations?

Watching how customers of competitors behave naturally when they do not know they are being watched.

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What are the advantages of carrying out observations?

Completely natural
Reliable results
Inexpensive
Up to date data

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What are the disadvantages of carrying out observations?

You cannot gain that much information
Could be expensive when carried out on a large scale
Time consuming

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What is an interview?

A 1 to 1 situation where questions are asked.

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How can interviews be carried out?

Face to face
Online chat rooms
Over the phone
Skype / FaceTime

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What are the advantages of carrying out interviews?

Questions can be made more personal
More detailed information gained
Online interviews aren’t too expensive
Up to date information

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What are the disadvantages of carrying out interviews

Expensive
Time consuming
Biased answers
Can be difficult to carry out on a large scale

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Name 4 form of secondary research

Trade associations and magazines
Market research companies
Company reports or previous sales information
Government statistics

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Name some advantages and disadvantages of trade associations and magazines

Advantage - specific information
Disadvantages - biased data
- out of date

Name some advantages and disadvantages of market research companies

Advantages - nationwide data
- reliable
Disadvantages - expensive to carry out
- out of date

Name some advantages and disadvantages of company reports and previous sales information

Advantages - free
                      - reliable 
Disadvantages - out of date
                           - not relevant 
                           - biased

Name some advantages and disadvantages of government statistics

Advantage - free
Disadvantages - not carried out very often (10 to 29 year gap)
- out of date

What is data analysis?

The process of looking into data to identify patterns or trends in order to make is useful. Once data has been analysed, conclusions can drawn which give an insight into customers, markets or competitors.

What is quantitive data?

Numerical data

Advantages of quantitative data?

Easy to analyse and read Can be categorised Large sample

Disadvantages of quantitative data?

Not specific | Can’t be sued in its own

What is qualitative data?

Descriptive information that can’t be measured in numbers.

Advantages of qualitative data

Lots of detailed information | Businesses can listen specifically to what consumers want

Disadvantages of qualitative data

Difficult to analyse/read Hard to categorise Subjective Small sample = biased result

What are the overall benefits to a company carrying out market research?

See what is needed in the market Understand what customers want Look at competitors - their failures and successes, price differences Minimise risks

What are the overall problems for a company of carrying out market research?

``` May not help that much Can be expensive Research may be difficult to find Time consuming therefore missing out on profit Biased / unreliable information ```

What is validity

A measure of how good the design and methods of research are and suggests whether the findings of the research can be trusted.

What is reliability?

An indication of whether the research results from a sample are representative of the population.

Why is it important that data collected is reliable and valid?

``` Money isn’t wasted Mistakes aren’t made Customers want the change / new product Bad reputation Time is spent wisely ```

What is market segmentation?

Dividing the market up into groups of buyers with similar characteristics / interest / needs.

How might a business segment the market?

``` Area (geographic) Professions Different genders Family Interests / hobbies Income Behaviour Age ```

Why do businesses segment the market?

Better matching of customer needs Increased sales which leads to increased profit Be more competitive

What is market mapping?

The process of creating a diagram that identifies all of the products in a market and make against 2 features (usually price vs quality)

What does market mapping allow companies to do?

It allows companies to see all of the products and services within a market, therefore indentifying its competitors. It also allows them to identify any gaps in the market.

What are the advantages of market mapping

Shows gaps in the market Identify competitors Clear and easy to read

What are the disadvantages of market mapping?

Not always accurate Not always helpful Can be subjective

What are direct competitors?

Businesses that sell the same products or services. E.g. McDonalds and Burger King

What are indirect competitors?

Businesses gang don’t sell the same product but still find themselves in competition with one another. E.g. if you wish to travel to France you could travel by plane, ferry or eurotunnel.

What are the advantages of competition?

Helps companies see different views and ideas Motivates brands Improves companies efficiency and quality

What are the disadvantages of competition?

Difficult to bring out new products Large businesses can exploit their power High competition can mean cutting costs which effects the service and workplace.

What acronym is used to assess strengths and weaknesses of a business and competitors and what does it stand for?

Strengths Weaknesses Opportunities Threats SWOT

What factors would be considered when carrying out a SWOT analysis?

``` Price Quality Location Product range Customer service ```

Why is it important to carry out a SWOT analysis for its competitors?

Easy to do Cheap Detailed information See where your businesses can improve