(PAPER 1) 1.1.2 market research

Question 1

weather you do product or market orientation depends on…

Answer 1

• cost to do it
• objectives of business
• how quickly you want to get the product out
• competitors
• type of product e.g. tech/mass market

Question 2

market research definition

Answer 2

the collection and analysis of market information

Question 3

bias definition

Answer 3

where the findings do not give a true reflection of the views of the target audience on the product or service

Question 4

reliability definition

Answer 4

the degree of which the research method produces stable and consistent results

Question 5

validity definition

Answer 5

how accurately a method measures what it is intended to measure

Question 6

product orientation definition

Answer 6

an approach to business which places the emphasis upon the production process and the product itself

Question 7

market orientation definition

Answer 7

an approach to business which places the needs of consumers at the centre of the decision making process

Question 8

primary research definition

Answer 8

the gathering of ‘new’ information which does not already exist

Question 9

secondary research definition

Answer 9

uses pre-existing data that has been gathered for another purpose

Question 10

quantitative research definition

Answer 10

the collection of data that can be quantified

Question 11

qualitative research definition

Answer 11

the collection of data about attitudes, beliefs and intentions

Question 12

sample definition

Answer 12

a small group of people who must represent a proportion of a total market when carrying out market research

Question 13

primary research methods:

Answer 13

• survey/questionnaire
• focus groups
• observation
• test marketing

Question 14

secondary research methods

Answer 14

• internet
• government data
• published reports
• internal data

Question 15

advantages and disadvantages of primary market research

Answer 15

+ specific to the business
+ up to date
- expensive to conduct
- time consuming

Question 16

advantages and disadvantages of secondary market research

Answer 16

+ fast access to information- quick and easy to gather
+ can gain valuable industry information
- may need to spend time finding the correct information
- could be out of date

Question 17

internet data

Answer 17

• secondary data
• coverage: high
• cost: very low
• time: very low
• quantitative research: high
• qualitative research:low
• overall effectiveness:high-doesn’t take time to access & don’t pay for it

Question 18

social networking definition

Answer 18

the use of internet based platforms to make connections with people

Question 19

database definition

Answer 19

an organised collection of data stored electronically with instant access, searching and storing facilities

Question 20

market segmentation definition

Answer 20

dividing a market into smaller sets of customers with similar needs and interests

Question 21

different ways to segment the the market

Answer 21

• age: older people- fragrances, younger people- toys
• income: e.g. fragrances- what fragrances people can afford
• lifestyle: e.g. grouping them on their attitudes, opinions and lifestyles
• location: e.g. fast food- may not deliver/base themselves in some places
• demographics: fast food-Muslims don’t eat pork… clothing- cater for different age groups, genders & religions
• behaviour: e.g. cars- the reason why your driving it e.g. got a family, collect cars

Question 22

advantages of market segmentation

Answer 22

• you can target your market more effectively and accurately
• you can encourage customer loyalty so you can afford to charge higher prices
• helps with your market research- if you know who your customers are, you’ll have a clearer idea of customer needs

Question 23

disadvantages of market segmentation

Answer 23

• you narrow the target market-small group of customers you can target
• meeting a very specific customer need e.g. quality would increase cost for business

Question 24

Disadvantages of product orientation

Answer 24

Can be risky for firms because this approach means that they don’t do market research meaning that they are not familiar with customer needs so they are likely to fail

Question 25

Advantage of product orientation

Answer 25

Makes the business more competitive because they can release products quicker without doing research therefore they beat competitors

Question 26

Disadvantages of market orientation

Answer 26

• continuous consultation (market research) may be costly and time consuming

Question 27

Advantages of market orientation

Answer 27

+ The business understands customer needs- more likely to attract customers to their business- satisfied customers- customer loyalty
+ able to anticipate market changes

Question 28

limitations of market research: sample size and bias

Answer 28

sample size: the amount of people who are asked to take part in the research
if the sample is TOO SMALL= there is more chance that respondents who do not reflect the overall views of the market are over-represented e.g. only 20 people are asked about a mass market product.

Sample bias- the way that respondents are selected may over-represent certain types of people who’s views may skew the overall findings away from the views of the total population being researched

Question 29

reasons why businesses may carry out market research

Answer 29

• identify and anticipate customer needs and wants

- quantify likely demand

Question 30

limitations of market research

Answer 30

• can be out of date quickly

- prone to bias/ sample size

Question 31

why might a business use quantitative research rather than qualitative

Answer 31

• speedier to analyse and easier to spot patterns

- black and white data e.g. 60% say yes

Question 32

3 uses of ICT to support market research

Answer 32

1. websites- competitor research, cookie data
2. social networking- polls on Instagram
3. databases- Tesco loyalty cards