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Business Studies GCSE 2022-24 (Units 1-3) > Unit 3: Market Research (Chap 11) > Flashcards

Unit 3: Market Research (Chap 11) Flashcards

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1
Q

What does market research give a business information about?

A
  • Its customers
  • Its competitors
  • Its market
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2
Q

Notes on a market-orientated business

A
  • Most firms are market-orientated
  • The decision about what to produce is based on consumer demand for products as identified by market research
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3
Q

What are two benefits of a market-orientated business?

A
  • The risk of new products failing is reduced because they’ve been produced following market research which identifies customer needs
  • Products that meet the needs of consumers are likely to last longer in the market than goods which have been produced using a product-orientated approach
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4
Q

What are the benefits of market research?

A
  • Find out what consumers like and dislike about its products
  • Identify consumer tastes and preferences
  • Decide on the best promotion, packaging and distribution methods for its products (known as the product’s unique selling point)
  • Know the size of the market
  • Explain the reason for the sales of its current products
  • Predict how the demand for its products may change in the future
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5
Q

What can businesses use market research for?

A
  • Identify consumer needs
  • Discover the current and future market size for the product
  • Provide information about the business’s existing products and markets
  • Identify the strengths and weaknesses of competitor products
  • Decide on how to price and promote the product and how best to distribute the product to customers
  • Predict how changes and trends in consumer tastes and fashion may affect the future demand for products
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6
Q

Notes on primary research

A
  • Also known as field research
  • Involves collecting first-hand data
  • Collected by an organisation for the first time and for its own specific needs
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7
Q

Notes on secondary research

A
  • Also known as desk research
  • Uses data that already exists
  • E.g. data that a business holds in its records about existing customers
  • Most secondary data has been collected by another organisation and for a different purpose
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8
Q

What are the sources of secondary market research data?

A
  • Internet
  • Government publications
  • Newspapers and magazines
  • Libraries
  • Market research agencies
  • Local library
  • Internal business records
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9
Q

Internet

A
  • Data about almost any topic are available on the internet
  • Businesses have websites which may be a useful source of information
  • Data mustn’t be out of date
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10
Q

Government publications

A
  • Most governments publish data and information related to their own country
  • E.g. population statistics and the support available for businesses
  • gov.uk
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11
Q

Newspapers and magazines

A
  • Report information about the local, national and international economies
  • Business section in newspapers
  • Magazines specific to a particular industry e.g. the Oil and Gas Journal
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12
Q

Libraries

A

Large towns and cities in many countries have public libraries giving free access to printed materials and often internet access.

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13
Q

Market research agencies

A
  • Companies whose business is the collection and analysis of market data which is sold to other businesses
  • E.g. RNB Research which had Pan-Asia coverage including China, India and the UAE
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14
Q

Business records

A
  • Businesses collect information about their customers, which they might keep on a computer database
  • Records might include information such as the customer’s name, address, what they purchased and when they last made a purchase from the business
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15
Q

Benefits of primary research

A
  • Data is up to date
  • Data is collected for a specific purpose which is directly relevant to the business
  • It isn’t available to other businesses and this may provide a competitive advantage
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16
Q

Limitations of primary research

A
  • Costly to collect
  • Time-consuming
  • Risk of the data being inaccurate or containing bias
  • May been collected some time ago, so isn’t up to date
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17
Q

Benefits of secondary research

A
  • Fairly cheap
  • Easier and quicker to obtain than primary research data
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18
Q

Limitations of secondary research

A
  • May have been collected some time ago, so isn’t up to date
  • Not been collected for the specific purpose required by the business so may not be as reliable or as useful as primary data
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19
Q

What are the two types of primary research?

A
  • Quantitative research
  • Qualitative research
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20
Q

What are the methods of primary research?

A
  • Focus groups (only qualitative)
  • Observation
  • Test market
  • Consumer surveys
  • Interviews
  • Postal questionnaires
  • Consumer surveys

*Rest of the methods can be used to collect both qualitative and quantitative data

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21
Q

Focus groups (only qualitative) (Card 1)

A
  • Method of research most often used by manufacturers of consumer products, like hair shampoo
  • A group of consumers is invited to discuss topics such as new products, packaging, brand names and advertisements
  • Discussions often recorded or filmed
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22
Q

Focus groups (only qualitative) (Card 2)

A
  • Businesses can find out what ‘typical’ consumers think about a product and its marketing
  • E.g. a hair shampoo manufacturer can find out what consumers think of the colour, smell, name and packaging of a new shampoo
  • Results of the focus group might then be used to change one or more of these features to try to improve its successful entry into the market
23
Q

What is one problem with focus groups?

A

This method can be time-consuming to arrange and there is no numerical data collected, which makes statistical analysis impossible.

24
Q

Observation

A
  • Consumer behaviour is secretly observed and recorded by market researchers
  • This method is of (primary) research is often used by large supermarkets
  • They observe the customer’s behaviour as they select products from the many options on the shelves
  • Used to check the quality of service provided to customers
  • E.g. a hotel might use a ‘mystery guest’ to visit and stay at the hotel and report back to management about their experience!
25
Q

What is an advantage of observation?

A

What consumers do is often more accurate than what they say they do when answering questions by interviewers or on a questionnaire.

26
Q

What is the problem with observation?

A
  • More expensive than other methods because of the need to have trained observers to analyse customer behaviour
  • There’s no opportunity to ask consumers why they behaved as they did
27
Q

Test market

A
  • A limited quantity of the product is produced and sold in a carefully selected area of the market
  • Test market’s chosen to represent the total market
  • Feedback from consumers is used to make changes to the product or pricing, promotions and place where the product’s sold
  • This is before launching the product to the main market
28
Q

What is an advantage of test marketing?

A
  • The cost of any problems is limited to a smaller output - the quantity produced for the test market
  • Identifying and solving problems in the test market increases the chance of a more successful introduction of the product into the main market
29
Q

What is are the limitations of test marketing?

A
  • Longer to get the product to its main market
  • Cost of producing products for the test market makes this more expensive than other methods
30
Q

What are consumer surveys?

A
  • Surveys can collect both qualitative and quantitative data, often with the aid of a questionnaire
  • Several methods used
31
Q

What are examples of consumer surveys?

A
  • Interviews
  • Postal surveys
  • Online surveys
32
Q

Consumer surveys: Interviews

A
  • A trained interviews asks questions to an interviewee and records their answers
  • Could take place on the street or in the businesses premises like a supermarket
  • Or the interviewee’s own home
  • Some conducted by telephone
33
Q

What are the advantages of interviews?

A
  • The interviewer can explain any questions that the interviewee doesn’t understand
  • Often tell if the interviewee is honestly responding
  • If not, their responses can be ignored and this reduces the risk of collecting inaccurate data
34
Q

What are the limitations of interviews?

A
  • More expensive than other methods if trained interviewers are used
  • If trained interviewers aren’t used then there’s a greater risk of the data collected containing bias
  • This is because the interviewer asks questions in such a way that makes the interviewee give an answer which doesn’t represent their true feelings
35
Q

Consumer surveys: Postal surveys

A
  • Questionnaires are posted to people’s homes and they’re asked to complete and return them
  • Good way of getting the views of a population spread over a wide geographical area
  • Much cheap than the interview method
36
Q

What is a disadvantage of postal surveys?

A
  • Often seen as ‘junk mail’ and thrown away
  • This produces a very low response rate
  • Postal surveys may contain bias because only people with a real interest in the survey will bother to reply
37
Q

What is are advantages of online surveys?

A
  • They cover a very wide geographical area
  • Anyone with internet access can take part
  • Results are typed in an online questionnaire and can be instantly collected and analysed
38
Q

What are the limitations of online surveys?

A
  • Often seen as ‘electronic junk mail’
  • Risk that only those with a real interest in the subject take part
  • Results can’t be relied upon as representing the views of the whole population
39
Q

Why is sampling important?

A
  • When carrying out primary research it’s often too expensive and time-consuming to get the views of every consumer in the market
  • This problem can be overcome by selecting a sample from the total market
  • Various methods
  • The method chosen must produce a sample which is representative of the whole population
  • If not, then this may produce results which are biased and misleading
40
Q

What are 3 methods of sampling?

A
  • Random sampling
  • Stratified sampling
  • Quota sampling
41
Q

Why is market research data sometimes inaccurate? (Card 1)

A
  • Sample chosen may be too small or not representative of the population
  • Business may have chosen the wrong type of method to collect the data
  • Interviewees may not answer questions truthfully
  • Interviewer may ask questions in a way that encourages the interviewee to give an answer that doesn’t reflect their true view
42
Q

Why is market research data sometimes inaccurate? (Card 2)

A
  • Language used by the interviewer, or used in a questionnaire, may be unclear or difficult to understand
  • Data may be recorded incorrectly
  • Numerical analysis may be carried out incorrectly
  • Secondary data may be out of date
  • Secondary data may have been collected for a different purpose to the one it’s now being used for
43
Q

How is qualitative research presented?

A

Written reports

Managers use these when making decisions about what to do next, for example whether the product design should be changed, or whether they need to change the colour of the packaging.

44
Q

How is quantitative research presented?

A
  • Tables
  • Charts
  • Graphs
  • Pictograms
  • Line graphs
45
Q

What are the advantages of tables?

A
  • A large amount of data can be grouped and presented more clearly
  • Easy to extract numerical data
46
Q

What are the disadvantages of tables?

A
  • Lack visual impact
  • Too much data in the table can make it difficult for users to understand

These disadvantages can be overcome by presenting numerical data in charts and graphs.

47
Q

What are the advantages of a bar chart?

A
  • You can easily see the importance of each piece of data
  • You can read numerical values from the axis
48
Q

What is a disadvantage of a bar chart?

A

When the data values of the parts are very similar, it’s difficult to compare the various parts and the chart loses visual impact.

49
Q

What are the advantages of a pie chart?

A
  • They show how important each part of the data is compared to the other parts
  • Easier to understand for people who dislike numerical values, as there are no numbers
50
Q

What is a disadvantage of a pie chart?

A

If there are too many ‘slices’ then it’s difficult to see the relative importance of different parts of the data.

51
Q

What is an advantage of pictograms?

A

Data is represented by pictures and not numbers and this helps people who are less numerate.

52
Q

What is a disadvantage of pictograms?

A

It is difficult to show exact quantities using pictures.

53
Q

What are the advantages of a line graph?

A
  • Clearly show trends
  • Values can be read off from both axes
  • Data can be added for future time periods
54
Q

What is a disadvantage of a line graph?

A

They can be difficult to draw and accuracy depends on choosing appropriate scales for both axes.

Business Studies GCSE 2022-24 (Units 1-3) (21 decks)

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