UNIT 3 - Chap 11: Market research

Question 1

What is the definition of market research?

Answer 1

Market research is the process of gathering, analysing and interpreting information about a market. ​

Question 2

What are the 4 main piece of information a business can find out from MR? (4)

Answer 2

1. How much customers are willing to pay ​
2. Where would they like the product to be sold ​
3. What type of promotion would be effective ​
4. Who their main competitors are.

Question 3

What is the definition of Product orientated?

Answer 3

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.​

Question 4

What is the definition of market orientated?

Answer 4

Market orientated: Businesses carry out market research to find out consumer wants before a product is developed and produced ​

Question 5

What are the 2 types of MR? (2)

Answer 5

1. Primary research
2. Secondary research

Question 6

What is definition of primary research?

Answer 6

The collection of new data. It involves direct contact with potential or existing customers. ​

Question 7

What are the 4 methods of primary research?

Answer 7

1. Focus groups
2. Interviews
3. Questionnaires
4. Online surveys

Question 8

What are the benefits of online surveys? (2)

Answer 8

1. Easy to complete for the customer so they are more likely to complete it​
2. Quick response time as completed online and data/results can be quickly presented on charts​
   ​

Question 9

What are the drawbacks of online surveys? (2)

Answer 9

1. Absence of interviewer means consumer may answer too briefly as they are not being prompted ​
2. Consumers may rush the survey and so results may not be correct​

Question 10

What are the benefits of questionnaire? (2)

Answer 10

1. Detailed information can be obtained about the price customers are willing to pay, their age etc ​
2. Opinions can be obtained on open ended questions E.g. asking them on their opinions about products ​

Question 11

What are the drawbacks of questionnaire? (2)

Answer 11

1. Gathering and Collating results is time consuming. Time could have been better spent elsewhere. ​
2. Bias could occur if they do not question a fair sample. E.g. If Apple only questioned teenagers it would be an unfair representation.

Question 12

What are the benefits of focus groups? (2)

Answer 12

1. Provide detailed information about customers tastes and preferences ​
2. Quicker and cheaper than individual interviews​
   ​

Question 13

What are the drawbacks of focus groups? (2)

Answer 13

1. If conducted by a specialist market research agency this can be time consuming and expensive compared to surveys​
2. Feedback could be biased if some people on the panel are influenced by the opinion of others.

Question 14

What are the benefits of interviews? (2)

Answer 14

1. Detailed information can be gathered about what customers like and dislike about the product ​
2. The Interviewer can explain the questions carefully so consumers answer them correctly​
   ​

Question 15

What are the drawbacks of interviews? (2)

Answer 15

1. Very time consuming to carry out. This time could be spent on training staff, improving the quality of the product ​
2. Could lead to bias if the interviewer tries to prompt consumers with the answers they want to hear ​

Question 16

What are the 2 methods of sampling? (2)

Answer 16

1. A random sample
2. A quota sample

Question 17

Explain what random sampling is?

Answer 17

1. 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​

Question 18

Explain what quota sampling is?

Answer 18

People are selected on the basis of characteristics (age, gender, income) E.g. street interviewers must interview 40 males and 40 females

Question 19

What are the 4 types of secondary research? (4)

Answer 19

1. Government Statistics
2. Newspapers
3. Market Research agencies
4. Looking at customer records, sales history and feedback from the customer service department.

Question 20

Explain what MR agencies are?

Answer 20

Specialist agencies that carry out research on behalf of Companies. E.g. Mintel (Expensive to buy)

Question 21

What are the 2 benefits of primary research? (2)

Answer 21

1. Up-to-date information so more accurate​
2. Produced for the business itself so more specific and accurate​

​

Question 22

What are the 2 benefits of secondary research? (2)

Answer 22

1. Cheap/free (except market intelligence reports e.g. Mintel).​
2. Easy and quick to obtain, so business can focus their time elsewhere​

​

Question 23

What are the 2 drawbacks of primary research? (2)

Answer 23

1. More costly than secondary research as the business may have to pay interviewers and researchers​
2. Time consuming collecting and collating data.​

Question 24

What are the 2 drawbacks of secondary research? (2)

Answer 24

1. More likely to be out of date compared to primary research therefore could be inaccurate​
2. Not collected for the business itself so therefore not specific​