Understanding markets and customers

Question 1

Examples of primary market research are:

Answer 1

Surveys/questionnaires
Focus groups
Observations

Question 2

Advantages primary research

Answer 2

Specific to the business.
Meets precise needs of the business.
Can discover information that no other business has access to.

Question 3

Disadvantages primary research

Answer 3

-Needs specialist knowledge to set up and carry out.
-Can be expensive.
-Often time-consuming.
May not be comprehensive enough to make an informed decision – not enough information.

Question 4

Seconadary research advantages

Answer 4

Cheaper.

Quick to access.

Question 5

Secondary research disadvantages

Answer 5

Not always in the format that the business wants.
Available to competitors.
May only partially answer the specific questions

Question 6

Quantitative data is?

Answer 6

numbers, like how many customers prefer one product over another.

Question 7

Qualitative data is…

Answer 7

opinions and motives, like why the customers prefer the product.

Question 8

Businesses use market mapping to:

Answer 8

Assess product position to help make decisions on the direction of their marketing mix.
Assess how to adjust other strategies, for example operational management of quality.
Essentially to see how to beat the competition to gain more sales.

Question 9

Why use sampling?

Answer 9

Saves time. A quicker answer can lead to a product being launched or adjusted before the competition makes their move.
Saves money by not going through the process of asking the whole the group, which may be impractical anyway

Question 10

Disadvantages of sampling?

Answer 10

Might be biased – the questions might be incorrectly formulated or not be collated properly.
Sample size might be too small.

Question 11

extrapolation is

Answer 11

Extrapolation is a method of predicting a possible future value. It’s done by looking at past trends and then estimating the outcome if that trend continues in the future.

Question 12

Correlation?

Answer 12

Positive correlation – A direct relationship between two variables. As the independent variable increases the dependant variable increases.
For example, as more is spent on advertising sales increase.
Negative correlation – An inverse relationship between two variables. As the dependant variable falls the independent variable rises and vice versa.
For example, as investment in training increases product defects falls.
No Correlation – There is no link between the two variables.
Correlation can also be expressed numerically as a value between +1 (positive correlation) and –1 (negative correlation).
The closer the figure is to +1 or –1 the stronger the positive or negative correlation.