Business 4.4

Question 1

Why organisations carry out market research

Answer 1

• Understand customers’ needs and purchasing behaviours.
• Reduce risk of product failure.
• Identify potential changes in the market.
• Assess the effectiveness of different marketing actions.
• Investigate new possibilities in existing or new markets.

Question 2

What are all the different Types of market research:

Answer 2

1. Product-based research: Focused on meeting market needs.
2. Price-based research: Focused on competing prices with competitors.
3. Promotion-based research: Understanding the appropriate advertisement media.
4. Place-based research: Evaluating customer’s needs on way of product distribution.
5. People-based research: Detailing on the customer’s experience to gain repeat customers.
6. Process-based research: Focusing on appropriate processes for delivering services.
7. Physical evidence-based research: Providing customer with visual and sensory experience.

Question 3

How organisations carry out market research

Answer 3

Primary and secondary

Question 4

What is primary market research

Answer 4

also referred as ‘field research’, aims to answer a specific research question, new data only accessible by the business itself to fit their needs but it can be expensive and time consuming.

Question 5

How can primary market researhc be done

Answer 5

• Surveys
• Interviews
• Focus groups
• Observations

Question 6

Advantages primary market research

Answer 6

Provides direct information about customer’s tastes and preferences.

Provides information about reasons for purchases.

Provides unique information that can give a competitive advantage.

Question 7

limitations primary market research

Answer 7

Can be expensive and time-consuming to implement

Requires well-trained staff.

Challenge in forming effective questions.

Question 8

What is secondary market research

Answer 8

aims to support the business in gaining an overview of the market to learn general information of its target market and the external business environment.

Question 9

Types of secondary market research

Answer 9

• Market analyses
• Academic journals
• Government publications
• Media articles
• Other online content

Question 10

Advantages of secondary market research

Answer 10

Provides information at a lower cost.

Allows understanding on a broader scale of the economy, population or general trends.

Readily available.

Question 11

Disadvantages of secondary market research

Answer 11

Reliant upon other’s research. \

Needed information lacks as it had not been researched.

Existing information is not relevant to the business’s purpose.

Question 12

Advantages and disadvantages of surveys

Answer 12

• Advantages:
  Collect large quantities of data.

Collect wide range of information on attitudes, preferences, etc.

Can be quickly and easily completed by respondents.

• Disadvantages:
  Response rates are generally low.

Respondents might not represent the market.

Care needs to be taken to write good questions.

Question 13

Advantages and disadvantages of interviews

Answer 13

• Advantages:
  Easier to ask more in-depth questions than in a survey to collect detailed information.

Follow up questions can be asked. Usually high response rate.

• Disadvantages:
  Time consuming to interview and analyse results.

Expensive due to time it takes. Interviewer might influence respondent answers, making them biased.

Question 14

Advantages and disadvantages of focus groups

Answer 14

Focus groups consist of small groups of targeted customers with similar characteristics (e.g., male, female, or children)

-Advantages:
Easier to ask in-depth questions where details can be gained.

Allows follow up questions. High response rate.

-Disadvantages:
Time-consuming.
Expensive to organise.
Interviewees influenced by interviewer’s questions.

Question 15

Advantages and disadvantages of observations

Answer 15

advantages of observations:

Observations are not reliant on the willingness of people to participate in market research, unlike with surveys and interviews.

Results are likely to be accurate, realistic and representative as behaviours are monitored. In any case, observations tend to be more objective than interviews or surveys as bias is largely removed.

Disadvantages of observations:

Observations are very time consuming, and interpretation of the findings can be highly labour-intensive.

Research subjects may act differently if they know they are being monitored.

Question 16

Advantages and disadvantages of market analyses

Answer 16

Advantages of market analyses:
Market analyses are generally cheaper, and less time-consuming to gather, than primary market research as an alternative.

In addition, as a form of secondary research, the information has already been gathered and is available. This helps firms to access up-to-date market data and trends.

-Market analyses provide detailed information about various aspects of a product, market or industry.

Market research agencies specialise in producing market analyses, providing detailed market intelligence reports. Most organizations are do not have such expertise to gather data to produce such detailed reports. These specialise also usually update their analyses in order to keep them relevant.

Disadvantages of market analyses
It can be expensive to use market analyses, as they usually have to be paid for. For example, data on Statista is predominantly only available to its subscribers. Hence, market analyses may not be readily available to smaller organizations.

Market analyses can become dated rather quickly, unless the source provides regular updates.

The data is not exclusive to any organization, as rivals can also purchase these reports, or subscribe to agencies that provide up-to-date analyses.

Question 17

Advantages and disadvantages of academic journals

Answer 17

Advantages of academic journals:

Articles published in scholarly journals contain the most up-to-date research in an academic discipline.

The data and information in the academic journal is likely to be reliable as it has been produced by scholars in a systematic way, and with the feedback and assessment of peers.

Disadvantages of academic journals:

The information is not always relevant to businesses, and the contents or findings are often contested.

Universities and academic establishments tend to only allow paying subscribers to access academic journals.

Question 18

Advantages and disadvantages of media articles

Answer 18

Advantages of media articles:

The online versions of media articles are readily available to users, 24 hours a day, every day. With advances in technology, many more people have access to websites and apps of the larger newspapers companies and news broadcasters.

News media articles are released extremely frequently. These are often updated regularly too, providing market researchers with easy and frequent access to up-to-date information.

Many media sources do not require users to take out a subscription in order to access their websites.

The growing popularity of social media and social media marketing (SMM) mean that news via media articles can be easily spread/shared via social networks (such as Twitter, Facebook, and Instagram).

Disadvantages of media articles:

There is potential bias from the journalists and authors.

Articles can become out of date (and hence irrelevant) quite quickly.

Many magazines, such as IB Review, require a subscription in order for users to access the resource.

Question 19

Advantages and disadvantages of government publications

Answer 19

Advantages of government publications:

Data and statistics from the government are usually comprehensive, reliable and up-to-date.

There is a large volume of government publications, covering a wide range of topics, so this provides market researchers with a wealth of data and information.

A lot of government publications are available for free.

Disadvantages of government publications:

Due to the vast amount of information available, identifying and locating government publications can be difficult.

Not all data and information are readily available or are only obtainable for a fee.

Question 20

What are observations in terms of primary market research

Answer 20

Observations are a form of primary market research that involve researchers watching, monitoring and recording how customers behave or react to certain situations. For example:

a theme park operator might want to monitor the average queueing time for its rides

restaurant owners might want to observe the how long it takes, on average, for diners to be served their meals

Question 21

Advantages and disadvantages of online content

Answer 21

Advantages of online content:
Online content can provide market researchers with access to a large and broad range of data and information.

Information is generally available quickly and at relatively low cost. A lot of online content is readily available free of charge.

Official company websites provide up to date news and information about current matters related to the organization and the market(s) in which it operates.

Disadvantages of online content:
As there is so much information available on the Internet, it can be challenging to find the best sources with accurate and up to date data and information.

As anyone can publish information online (such as blogs, social media platforms, and YouTube) the information can be inaccurate or biased. Unless maintained regularly, this information can become outdated quite quickly.

Accessing online content can be costly, such as subscription charges to The Financial Times, Statista, and The Economist.

Question 22

What is qualitative research

Answer 22

Qualitative research involves collecting non-numerical data, key questioned asked is “Why?”, small samples sizes but more information gathered. Data collected through focus groups or listening on customer service calls.

Question 23

What is quantitative research

Answer 23

Quantitative research refers to collecting numerical data, gathering small amount of information from large sample sizes. Primary researching includes surveys and observations. Secondary researching includes government population statistics or market analysis reports.

Question 24

what are the different types of sampling

Answer 24

Random sampling
Quota sampling
Convenience sampling

Question 25

What is random sampling + adv and dis

Answer 25

Advantages of random sampling:

Results are, in theory, random as everyone in the population has an equal chance of being selected for research.

Results are therefore (in theory) free from researcher bias and sampling errors, so are more likely to be accurate and representative.

It is a quick and simple method of sampling, particularly if research participants are freely available.

Disadvantages of random sampling:

Random sampling only tends to work well if members of a population are likely to have similar views or characteristics.

The sample, being just random, could be very skewed, so is not necessarily representative of the population.

The sample needs to be large enough to generate results consistent with the opinions and views of the target population, but this can be time consuming and costly to implement.

Question 26

What is quota sampling + adv and dis

Answer 26

Advantages of quota sampling:
Unlike random sampling, quota sampling enables researchers to gather representative data from sub-groups.
It is suitable when researchers want to detect possible relationships between sub-groups.

It enables researchers to investigate particular traits (characteristics) of a certain sub-group in order to improve its marketing strategies.

The researcher has control of who is included in the sample.

The findings are usually more reliable than those collected from random sampling, especially where the proportions of the different sub-groups of the population are known in advance.

Disadvantages of quota sampling:

Researchers need time to determine the characteristics on which they will base the quota sample in order to generate representative results.

Selection is not random, so can be subject to researcher bias and sampling errors. This means that results might not be statistically representative.

Question 27

What is convenience sampling + adv and dis

Answer 27

Advantages of convenience sampling:

Samples are created by using research subjects who are easily and readily accessible.

It is the quickest, easiest, and cheapest method of sampling.

Disadvantages of convenience sampling:

As the least representative method of sampling, the results may be biased and atypical. Hence, the research findings may be of limited use.

Therefore, it is unlikely the convenience sample will accurately represent the views of the wider target population.

Question 28

What is sampling error

Answer 28

When a researcher inappropriately designs market research, this is referred to as a sampling error. Such errors are caused by poor sample design or methodology. For example, a group of students doing research for a school project may find convenience sampling easier than stratified sampling. Sampling errors can also be caused by the sample size being too small or having bias built into the research

When an inappropriate sampling methodology is used, this causes a non-sampling error. These mistakes are not attributed to human errors. For example, untruthful answers by respondents distort the results and findings.