Theme 1 Topic 10 - Market Research

Question 1

Define Market Orientated Approach

Answer 1

A business reacts to what customers want, rather than what they think is right for the customer

Question 2

Define Product Orientated Approach

Answer 2

The business develops products based on what they are good at making or doing, rather than starting with what a customer wants

Question 3

Why are most markets moving towards a more market orientated approach?

Answer 3

Customers have become more knowledgeable and require more variety and better quality

Question 4

Define Market Research

Answer 4

Gathering and analysing data to assist with business decision making

Question 5

What are three examples of reasons to conduct market research?

Answer 5

To find a gap in the market, To inform pricing decisions, To anticipate demand levels

Question 6

Define Primary Research

Answer 6

The collection of information first-hand for a specific purpose

Question 7

What are three examples of primary research methods?

Answer 7

Questionnaire, Telephone survey, Focus group

Question 8

Define Secondary Research

Answer 8

Using information that already exists

Question 9

What are three examples of secondary research methods?

Answer 9

Government reports, Competitor information, Newspapers

Question 10

Define Quantitative Research

Answer 10

Using closed questions for larger samples to generate results in numerical form, more statistically valid

Question 11

Define Qualitative Research

Answer 11

Based on in-depth opinions and attitudes obtained from small numbers of people, not statistically valid

Question 12

What are two advantages of primary research?

Answer 12

Can be tailored to the businesses specific needs, More likely to be up to date

Question 13

What are two disadvantages of primary research?

Answer 13

Can be costly and time consuming to carry out, Entrepreneur may lack skills to carry out the research thoroughly and without bias

Question 14

What are three advantages of secondary research?

Answer 14

Often cheaper to obtain, May have been carried out by professionals so more reliable, Allows trends to be spotted as research is carried out regularly

Question 15

What are three disadvantages of secondary research?

Answer 15

May be out of date, Could be of little relevance to the businesses specific needs, All competitors also have access to the information so its unlikely to give an advantages to the start-up

Question 16

Define Sampling

Answer 16

Businesses can’t ask all potential customers when doing primary research, so only a proportion is asked

Question 17

Larger samples tend to be…

Answer 17

More accurate BUT are costly and time consuming

Question 18

Smaller samples tend to be…

Answer 18

Quicker and cheaper BUT can be inaccurate if a few anomalies are surveyed

Question 19

Define Sample Bias

Answer 19

When collecting large samples, it is possible to get inaccurate findings due to sample bias

Question 20

What are three types of sample bias?

Answer 20

Interviewer bias, Bias questions, Respondent bias

Question 21

What are three ways ICT can be used in market research?

Answer 21

Websites, Social media, Databases

Question 22

What are three advantages of using websites to conduct market research?

Answer 22

Automatically generate customer questionnaires, Can be used to target all customers, Good way to get ‘free’ research

Question 23

What are two disadvantages of using websites to conduct market research?

Answer 23

Could lead to biased results if people don’t answer correctly in order to get it done quickly, Setting up complex sites that conduct surveys can use valuable man hours

Question 24

What are two advantages of using social media to conduct market research?

Answer 24

Creates a bond between consumers, Provides a way to gain a fuller understanding of what customers really want

Question 25

What is one advantage of using data bases to conduct market research?

Answer 25

Provides the business with a range of information (e.g. Tesco Clubcard tells them what customers are buying)

Question 26

Define Market Segmentation

Answer 26

The process of dividing up a market into groups with similar characteristics

Question 27

What are three examples of market segments?

Answer 27

Age, Gender, Income

Question 28

What are three reasons businesses segment their markets?

Answer 28

To get a better understanding of the needs of the market, To increase sales by adapting to new segments, To identify ways of promoting a product

Question 29

What are four drawbacks of market segmentation?

Answer 29

Difficulty in identifying the most important segments for a product, Meeting the needs of customers not included in the chosen segment, Segmentation approximates behaviour, Targeting different segments is more complex and costly