Theme 1 Topic 10 - Market Research Flashcards
Define Market Orientated Approach
A business reacts to what customers want, rather than what they think is right for the customer
Define Product Orientated Approach
The business develops products based on what they are good at making or doing, rather than starting with what a customer wants
Why are most markets moving towards a more market orientated approach?
Customers have become more knowledgeable and require more variety and better quality
Define Market Research
Gathering and analysing data to assist with business decision making
What are three examples of reasons to conduct market research?
To find a gap in the market, To inform pricing decisions, To anticipate demand levels
Define Primary Research
The collection of information first-hand for a specific purpose
What are three examples of primary research methods?
Questionnaire, Telephone survey, Focus group
Define Secondary Research
Using information that already exists
What are three examples of secondary research methods?
Government reports, Competitor information, Newspapers
Define Quantitative Research
Using closed questions for larger samples to generate results in numerical form, more statistically valid
Define Qualitative Research
Based on in-depth opinions and attitudes obtained from small numbers of people, not statistically valid
What are two advantages of primary research?
Can be tailored to the businesses specific needs, More likely to be up to date
What are two disadvantages of primary research?
Can be costly and time consuming to carry out, Entrepreneur may lack skills to carry out the research thoroughly and without bias
What are three advantages of secondary research?
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
What are three disadvantages of secondary research?
May be out of date, Could be of little relevance to the businesses specific needs, All competitors also have access to the information so its unlikely to give an advantages to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
Define Sampling
Businesses can’t ask all potential customers when doing primary research, so only a proportion is asked
Larger samples tend to be…
More accurate BUT are costly and time consuming
Smaller samples tend to be…
Quicker and cheaper BUT can be inaccurate if a few anomalies are surveyed
Define Sample Bias
When collecting large samples, it is possible to get inaccurate findings due to sample bias
What are three types of sample bias?
Interviewer bias, Bias questions, Respondent bias
What are three ways ICT can be used in market research?
Websites, Social media, Databases
What are three advantages of using websites to conduct market research?
Automatically generate customer questionnaires, Can be used to target all customers, Good way to get ‘free’ research
What are two disadvantages of using websites to conduct market research?
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
What are two advantages of using social media to conduct market research?
Creates a bond between consumers, Provides a way to gain a fuller understanding of what customers really want
What is one advantage of using data bases to conduct market research?
Provides the business with a range of information (e.g. Tesco Clubcard tells them what customers are buying)
Define Market Segmentation
The process of dividing up a market into groups with similar characteristics
What are three examples of market segments?
Age, Gender, Income
What are three reasons businesses segment their markets?
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
What are four drawbacks of market segmentation?
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
