3.3.2 Flashcards
Understanding markets and customers (38 cards)
What is market research?
It involves gathering and analysing data relevant to the marketing process.
Give 3 reasons why market research can help businesses
- Gain a more detailed understanding of consumers’ needs
- Reduce the risk of product/business failure
- Forecast future trends
What is the market research process?
- Research objectives
- Perform secondary research
- Analyse secondary research
- Decide on primary research methods
- Conduct primary research and analyse the data
- Present the data and produce the report
What is primary market research and what are some common methods of obtaining it? (List 3)
Research data that is collected first-hand for a specific research purpose
- Focus groups
- Interviews
- Surveys
- Mystery shoppers
- Product testers
List 3 advantages and 3 disadvantages of obtaining primary market research.
- Unique to your business
- Not outdated
- Competitors wont have access
- Time consuming
- Biased data
- Accuracy depends on sample size
- Opportunity cost
What is secondary market research and what is the difference between internal and external secondary data?
It uses data that already exists and has been collected by someone else for another purpose
Internal = Comes from within the firm itself
External = Data that has been published by other organisations
List 3 advantages and 3 disadvantages of obtaining secondary market research
- Already done for you (wastes no time)
- Usually free online
- Often easy to analyse
- Could be outdated
- Competitors have access
- Not specific to your company
What is quantitative data? List 2 advantages and disadvantages of using it
= Structured, statistical data with a narrow focus
- Quick and easy to analyse
- Usually more participants, making data more representative/accurate
- Lacks depth, no reasoning behind results
- Reader may misinterpret the question as they are not being talked through it
What is qualitative data? List 2 advantages and disadvantages of using it
= Expressed in words to help understand consumer thoughts
- Helps understand consumer wants and needs
- Answers are more in depth, which assists with making accurate decisions
- Expensive
- Time consuming
What is sampling?
= Getting opinions from a number of people, chosen from a speciifc group, in order to find out about the whole group
What is random sampling?
= Names picked randomly from a list (usually the electoral register)
What are some issues with using random sampling?
- May not guarantee accurate representation of the vital subsets of the larger population
When is random sampling appropriate to use?
- With quantitative data
What is stratified data?
= Where the population is divided into groups and people are picked randomly from each group
What are some issues with using stratified sampling?
- Time consuming
- Risk of overlooking key subsets
When is stratified data appropriate to use?
- When you have a lot of time
- Good for niche products
What is quota sampling?
= Where people are put into categories to help gain opinions from target audiences (most common form)
What are some issues with quota sampling?
- Prone to bias
- Not random (may not be representative)
When is quota sampling appropriate to use?
- When you want to suit needs of particular demographics
What are confidence intervals?
= It gives the percentage probability that an estimated range of possible values includes the actual range
What are confidence levels?
= The probability that the research findings are correct
What is inference?
= Drawing conclusions about the population based on data
Why are confidence intervals so useful in business? List 3 reasons.
- Helps business evaluate the reliability of a particular estimate
- No estimate can be 100% reliable, so they need to know whether to act on it or not.
- They benefit from the use of statistics in predicting future events
What is correlation?
= The relationship between 2 variables
