4.4 Market research

Question 1

What is market research?

Answer 1

marketing activities designed to discover the opinions, beliefs and preferences of potential and existing customers

Question 2

What is the purpose of market research?

Answer 2

gives businesses up-to-date info
enables businesses to improve their marketing strategies
assesses customer reactions to a new product by testing it on a small group of customers
gives businesses an understanding of the activities and strategies of rivals
helps businesses to predict what is likely to happen in the future

Question 3

What is primary research?

Answer 3

market research that involves gathering new data first-hand for a specific purpose

Question 4

What are the different techniques of primary research?

Answer 4

surveys
interviews
focus groups
observations

Question 5

Ads + disads of primary research

Answer 5

\+ relevance 
\+ up to date 
\+ confidential and unique 
- time consuming 
- costly 
- validity

Question 6

What is secondary research?

Answer 6

involves the collection of second-hand data and information that already exists.

Question 7

What are the different techniques of secondary research?

Answer 7

market analyses
academic journals
governmental publications
media articles

Question 8

Ads + disads of secondary research

Answer 8

\+ cheaper and faster
\+ provides insight
\+ huge range of resources
\+ based on large sample sizes
- outdated
- irrelevant 
- only provide partial information 
- available to competitors

Question 9

What are ethical considerations of market research?

Answer 9

needs to be systematic, consistent and unbiased.

must not cause damage, be deceitful, deceptive.

Question 10

What is the difference between quantitative and qualitative market research?

Answer 10

Qualitative market research involves getting non-numerical answers and opinions from respondents.
Quantitative market research relies on a much larger number of responses to get hard’ answers (factual and measurable information rather than people’s opinions).

Question 11

What are the advantages of qualitative research?

Answer 11

+ explore driving and restraining forces
+ rich info
+ inexpensive
+ one-to-one interviews: respondents are not under the pressure
- findings are not representative of the whole population
- time consuming
- expertise
- interview bias

Question 12

What is sampling?

Answer 12

the practice of selecting a small group (or sample) of the population for a particular market for primary research purposes.

Question 13

What are the different types of sampling?

Answer 13

Quota
Random 
Stratified 
Cluster 
Snowballing 
Convenience

Question 14

Quota sampling ads + disads

Answer 14

a certain number of people (known as the quota) from different market segments is selected according to shared characteristics such as age, gender or occupation.
+ relatively representative sample can be obtained
+ findings are reliable
- not representative of the whole population –> sampling errors

Question 15

Random sampling ads + disads

Answer 15

involves giving everyone in the population an equal chance of being selected for the sample.
+ easy to get a sample
+ everyone has an equal chance of being selected
- indiscriminate

Question 16

Stratified sampling ads + disads

Answer 16

chooses a number of respondents from each stratum that is proportional to the population and then randomly selects them as the sample.
+ more representative
- difficult to select relevant data
- expensive

Question 17

Cluster sampling ads + disads

Answer 17

used when getting feedback from respondents involves too much time, travelling or money.
+ quick, easy, cheap
- bias and sampling error

Question 18

Snowballing sampling ads + disads

Answer 18

market research carried out with individuals who then suggest other friends, family members or colleagues to increase the sample size.
+ cheap and quick
- difficult to determine unbiased findings

Question 19

Convenience sampling ads + disads

Answer 19

uses subjects that are easy (convenient) to reach.
+ ease of data collection
- exclude a large proportion of the population

Question 20

What are the two types of errors from data collection?

Answer 20

non-sampling errors

sampling errors

Question 21

Non-sampling errors and causes

Answer 21

• caused by human error or human behaviour.
• researcher’s mistakes in recording, processing or analysing data.
• respondents do not give truthful responses

Question 22

Sampling errors and causes

Answer 22

sample size is too small
sample selected is not representative
inappropriate sampling is used
bias