UNIT 3 - Chap 11: Market research Flashcards
What is the definition of market research?
Market research is the process of gathering, analysing and interpreting information about a market.
What are the 4 main piece of information a business can find out from MR? (4)
- How much customers are willing to pay
- Where would they like the product to be sold
- What type of promotion would be effective
- Who their main competitors are.
What is the definition of Product orientated?
Product orientated: Produce the product first and then find a market for it. E.g. basic foods i.e. rice, potatoes. Many businesses don’t use this approach as it is risky as they could produce a product that customers don’t want.
What is the definition of market orientated?
Market orientated: Businesses carry out market research to find out consumer wants before a product is developed and produced
What are the 2 types of MR? (2)
- Primary research
- Secondary research
What is definition of primary research?
The collection of new data. It involves direct contact with potential or existing customers.
What are the 4 methods of primary research?
- Focus groups
- Interviews
- Questionnaires
- Online surveys
What are the benefits of online surveys? (2)
- Easy to complete for the customer so they are more likely to complete it
- Quick response time as completed online and data/results can be quickly presented on charts
What are the drawbacks of online surveys? (2)
- Absence of interviewer means consumer may answer too briefly as they are not being prompted
- Consumers may rush the survey and so results may not be correct
What are the benefits of questionnaire? (2)
- Detailed information can be obtained about the price customers are willing to pay, their age etc
- Opinions can be obtained on open ended questions E.g. asking them on their opinions about products
What are the drawbacks of questionnaire? (2)
- Gathering and Collating results is time consuming. Time could have been better spent elsewhere.
- Bias could occur if they do not question a fair sample. E.g. If Apple only questioned teenagers it would be an unfair representation.
What are the benefits of focus groups? (2)
- Provide detailed information about customers tastes and preferences
- Quicker and cheaper than individual interviews
What are the drawbacks of focus groups? (2)
- If conducted by a specialist market research agency this can be time consuming and expensive compared to surveys
- Feedback could be biased if some people on the panel are influenced by the opinion of others.
What are the benefits of interviews? (2)
- Detailed information can be gathered about what customers like and dislike about the product
- The Interviewer can explain the questions carefully so consumers answer them correctly
What are the drawbacks of interviews? (2)
- Very time consuming to carry out. This time could be spent on training staff, improving the quality of the product
- Could lead to bias if the interviewer tries to prompt consumers with the answers they want to hear
What are the 2 methods of sampling? (2)
- A random sample
- A quota sample
Explain what random sampling is?
- People are selected at random. E.g. Everyone has a chance of being picked but not all of the people may be a potential customer of the product/service
Explain what quota sampling is?
People are selected on the basis of characteristics (age, gender, income) E.g. street interviewers must interview 40 males and 40 females
What are the 4 types of secondary research? (4)
- Government Statistics
- Newspapers
- Market Research agencies
- Looking at customer records, sales history and feedback from the customer service department.
Explain what MR agencies are?
Specialist agencies that carry out research on behalf of Companies. E.g. Mintel (Expensive to buy)
What are the 2 benefits of primary research? (2)
- Up-to-date information so more accurate
- Produced for the business itself so more specific and accurate
What are the 2 benefits of secondary research? (2)
- Cheap/free (except market intelligence reports e.g. Mintel).
- Easy and quick to obtain, so business can focus their time elsewhere
What are the 2 drawbacks of primary research? (2)
- More costly than secondary research as the business may have to pay interviewers and researchers
- Time consuming collecting and collating data.
What are the 2 drawbacks of secondary research? (2)
- More likely to be out of date compared to primary research therefore could be inaccurate
- Not collected for the business itself so therefore not specific
