Market research and sampling

Question 1

Define Market research

Answer 1

The process of collecting and analysing data on a market, consumers and competitors in order to make informed choices from findings

Question 2

What’s the difference between primary and secondary market research

Answer 2

Primary:
- Original data collected by company (data never existed before)
- e.g. Questionnaires, focus groups

Secondary:
- Collecting existing data from anywhere
- e.g. Online articles, Industry publications, Published company accounts, competitor websites

Question 3

Pros and Cons of Primary Research data

Answer 3

Pros:
- Specific to business
- Confidential data (competitive advantage)
- Often more reliable and accurate

Cons:
- Usually more expensive
- Time consuming (opportunity cost)

Question 4

Pros and Cons of Secondary Research data

Answer 4

Pros:
- Quicker
- Cheaper
- Easy to obtain
- Potentially more can be gathered

Cons:
- May lack specificity
- Could be unreliable
- Possibly outdated
- Specialist reports are often expensive

Question 5

What are the 2 types of data collected

Answer 5

Quantitative - Numerical information that is expressed and factual, therefore indisputable

Qualitative - Information about opinions, attitudes and feelings expressed with words and open to interpretation

Question 6

Pros and cons of Quantitative data

Answer 6

Pros:
- Data is easy to analyse
- Insight into trends
- Easily comparable

Cons:
- No explanation of data
- May lack reliability if sample size and method is not valid

Question 7

Pros and Cons of Qualitative data

Answer 7

Pros:
- Focuses on understanding customer
- Can highlight issues numbers can’t
- Explains findings
- Effective when testing 4 P’s

Cons:
- Expensive to collect and analyse (could require specialist)
- Based around opinions (sample could not be representative)

Question 8

What is Sampling and why is sample size important

Answer 8

Sample - group of respondents whose behaviour/views should be representative of target market

Size is important because:
- Too big = expensive and time consuming
- Too small = risk of anomalies skewing the data

Question 9

Explain the 2 sampling methods

Answer 9

Random:
- Everyone has an equal chance of being questioned
- Expensive fieldwork

Quota:
- Population segmented into groups reflecting target market
- Relatively cheap but may not represent whole population

Question 10

Benefits and drawbacks of sampling in Market research

Answer 10

Pros:
- Small sample group can give useful insights
- Sampling before making changes could reduce costs
- Sampling is flexible and relatively quick

Cons:
- Useless if sample group is unrepresentative
- Risk of bias in research questions
- Less useful in markets with changing tastes