Market Research

Question 1

Market research

Answer 1

Market research is the process of collecting information and data about a business’s customers, the market place and the activities of competitors within that marketplace.

Question 2

BUSINESS START UP AND MARKET RESEARCH

Answer 2

• Having an understanding of the market place is a major priority for an entrepreneur:
• It’s not enough having a good business idea • Is there a demand for the product or service? • Launching a new product/service carries risk
• HOW CAN MARKET RESEARCH REDUCE THE RISK FOR AN ENTREPRENEUR?

Question 3

MARKET RESEARCH

Answer 3

•SUPPORTS THE ENTREPRENEUR IN UNDERSTANDING ITS CUSTOMERS, THE MARKET WHICH IT OPERATES IN AND ITS COMPETITORS
•USING CONCRETE FACTS RATHER THAN GUESS WORK
•HELPS INFORM DECISIONS, LOWERING THE RISK TO THE BUSINESS IDEA SUPPORTS THE BUSINESS PLAN

Question 4

TYPES OF MARKET RESEARCH

Answer 4

THERE ARE 2 TYPES OF MARKET RESEARCH:
Primary research and secondary research

Question 5

PRIMARY RESEARCH

Answer 5

PRIMARY RESEARCH
• Gathers first hand information (field research)
• Data gathered is new (primary data), and should be directly relevant to the needs of the business
• Primary research is carried out when there is a need to collect information which is specific to the business and its products or service
• Questionnaires
• Focus Groups
• Consumer panels
• Test marketing

Question 6

SECONDARY RESEARCH

Answer 6

• Data that already exists and has been collected for
another purpose.
• The information (desk research) used has not been gathered specifically for the business but adapted for its use
• Official publications e.g. Census reports, social trends.
• Industry magazines – Which, The Grocer
• Yellow pages
• Internal information – e.g. sales and customer data

Question 7

What is sampling?

Answer 7

• When a business decides on the appropriate market size for a survey, it must consider:
– If the sample size is large, research will take a long time and it could be expensive
– If the sample size is too small, there is a greater chance that the results will be inaccurate or misleading

Question 8

BIAS

Answer 8

• Accuracy of the market research gathered will
determine how useful and important the information is to help the business make informed decisions
• It the data gathered from the sample valid and reliable?
• Bias is something that may cause the data within the sample to be weighted towards one side.
• This can occur when a sample has an overweighting towards one sub-group e.g. too many teenagers aged 16-19 within a research sample.
• A business can improve the validity bias by choosing a suitable sampling method e.g. Random Sampling or Quota Sampling