Theme 1.1.2: Metting Customer Needs - Market Research

Question 1

What is Market Research?

Answer 1

The process of gathering data in order to understand current and future customer needs and the nature of the market, this process reduces the risk involved in developing new business ideas

Question 2

What can Market Research be used for?

Answer 2

. To investigate consumer wants and preferences
. To investigate potential levels of demand
. To investigate consumer motivation
. To gain feedback
. To find gaps in the market
. To gain a competitive advantage

Question 3

Product Orientation

Answer 3

When a business focuses on creating a product rather than responding to the needs of the market, the priority is to develop a great product

Question 4

Examples of how primary data is gathered

Answer 4

. Questionnaires
. Surveys
. Focus Groups
. Interviews

Question 5

Examples of secondary research sources

Answer 5

. Government Statistics 
. Office of national statistics
. Trade Journals
. Customer records
. Competitors Accounts
. Accounting data

Question 6

What does Market Research result in a reduction of?

Answer 6

Risk when developing new business ideas

Question 7

What does market research aim to provide?

Answer 7

. Market information through analysing patterns and trends
. Customer preference
. Information regarding customer behaviours and motivation
. To provide information on potential gaps in the market
. Insight on competitors
. Insight on selling price
. To judge and assess success

Question 8

What can market research lead to?

Answer 8

. Better informed decisions
. Minimisation of risks
. Prediction of expected sales
. Gaining a competitive advantage

Question 9

Product Orientation

Answer 9

A businesses concentrates its efforts on creating the product rather than responding to market needs, the priority is to make it THEN sell it

Question 10

Market Orientation

Answer 10

A business concentrates its efforts on customer preferences and decisions are based on a good understanding of the market

Question 11

Primary Research (Field)

Answer 11

Collecting data directly from the original source by asking specific and relevant questions

Question 12

Methods of Primary Research

Answer 12

. Surveys
. Questionnaires
. Focus Groups
. Interviews

Question 13

Secondary Research (Desk)

Answer 13

The gathering of data from pre-existing sources such as online and paper based

Question 14

Methods of Secondary Research

Answer 14

. Government statistics
. Trade Journals
. Internal Sources
. Newspapers

Question 15

Advantages of Primary Research

Answer 15

. Can be designed to meet exact needs

. Information is specific, relevant and up to date

Question 16

Disadvantages of Primary Research

Answer 16

. Can be expensive and time consuming

. Care must be taken to avoid errors

Question 17

Advantages of Secondary Research

Answer 17

. Work already done by someone else
. Possibly of a better quality than you are capable of
. Easy and cheap to collect

Question 18

Disadvantages of Secondary Research

Answer 18

. May not fit the exact needs you require

. May be out of date or inaccurate

Question 19

Quantitative Research

Answer 19

Involves numerical data gathering or analysis

Question 20

Qualitative Research

Answer 20

Discovering genuine thoughts and opinions usually through written or verbal data

Question 21

Bias

Answer 21

When s sample includes disproportionate numbers of people from a particular market segment

Question 22

Limitations of Market Research

Answer 22

. Can only give accurate data if the questions asked are well designed and are not leading
. Samples have to be big enough so that they reflect the target market without being too big and costly
. Sample bias can lead to wrong data
. Hard to do in areas you are not familiar with e.g a foreign market
. Almost useless in dynamic markets as the second its printed it may be completely irrelevant

Question 23

Use of ICT in market research

Answer 23

. Huge data bases of customers can be created
. Online questionnaires can be filled out for cheap
. Specific advertising can be used to target certain people to measure their interest

Question 24

Market Segmentation

Answer 24

The way markets can be divided up into segments, each of which can have massively different customer preferences e.g Aldi vs M and S

Question 25

What segments are markets usually split up into?

Answer 25

Socio-economic grouping e.g:
. Age
. Gender
. Race
. Wealth
. Education
. Hobbies
. Interests

Question 26

Positives of Market Segmentation

Answer 26

. Niche market usually so less competition
. Products can be designed for consumers with distinctive preferences
. More likely to have repeat purchases due to a loyal consumer base

Question 27

Negatives of Market Segmentation

Answer 27

. Producing for specific markets can raise production costs and prices
. Selling in a wide range of markets can be costly
. Focusing on a mass market with a standardised profit can be more profitable