Market research and segmentation

Question 1

Define the term ‘market’

Answer 1

A place where buyers and sellers meet

Question 2

Name the 4 types of market

Answer 2

Local, global, niche, mass

Question 3

What are the two advantages of a local market?

Answer 3

1) Good relationship with customers

2) Easy travel and communication

Question 4

What are the two disadvantages of a local market?

Answer 4

1) Customer are limited

2) Demand is smaller

Question 5

What are the two advantages of a global market?

Answer 5

1) Variety of customers

2) More demand

Question 6

What are the two disadvantages of a global market?

Answer 6

1) Slow spread of reputation

2) More competition

Question 7

Define the term ‘niche market’

Answer 7

A specific product or service targeted at specific customers.

Question 8

What is an advantage of niche markets?

Answer 8

Can charge at premium prices

Question 9

Define the term ‘mass market’

Answer 9

Larger market having general advertisements

Question 10

What is an advantage of mass markets?

Answer 10

More volume of sales

Question 11

What is ‘market segmentation’?

Answer 11

Grouping customers based on similar interests and characteristics

Question 12

What does demographic segmentation base off of?

Answer 12

Characteristics

Question 13

What does psychographic segmentation base off of?

Answer 13

Hobbies and interests

Question 14

What does geographic segmentation base off of?

Answer 14

Location: in regards to business or if they live rurally or urban.

Question 15

What are the advantages of market segmentation?

Answer 15

1) Minimises unnecessary interaction with unworthy customers

2) Allows for more personal/effective market approaches

Question 16

Define the term ‘targeting’

Answer 16

Process of deciding which segment should be focused on during advertisement

Question 17

What is market size?

Answer 17

Volume or value of sales in that market

Question 18

What is market share?

Answer 18

Proportion of sales compared to all sales in that market

Question 19

What is the formula for market share?

Answer 19

(Sale of 1 / Sale of all) x 100

Question 20

What influences market growth?

Answer 20

1) New or change in demand
2) More competition
3) The economy

Question 21

Define the term ‘extrapolation’

Answer 21

Extracting data from past graphs to predict the future

Question 22

What are the advantages of extrapolation?

Answer 22

1) Can prepare

2) Is easy to carry out

Question 23

What are the disadvantages of extrapolation?

Answer 23

1) Could be inaccurate

2) Ignores qualitative info

Question 24

Define the term ‘primary research’

Answer 24

First hand research carried out by the individual who needs it, so that it is specific to them

Question 25

Give the 5 types of primary research

Answer 25

Observation, surveys, interviews, experiments, focal groups

Question 26

What are the two advantages of primary research?

Answer 26

Specific and first hand

Question 27

What are the two disadvantages of primary research?

Answer 27

Time consuming and expensive

Question 28

Define the term ‘secondary research’

Answer 28

Using existing info done by other sources, and adapting to your needs

Question 29

Give 3 types of secondary research

Answer 29

Internet, libraries, government statistics

Question 30

What are the two advantages of secondary research?

Answer 30

Cheap and pre-done

Question 31

What are the two disadvantages of secondary research?

Answer 31

Not specific and is accessible to competitors

Question 32

What is random sampling?

Answer 32

Each member has an equal chance of being chosen

Question 33

What is quota sampling?

Answer 33

Use proportions for equal representation of all groups in population