Chapter 18- Conducting Market Research

Question 1

How does an entrepreneur come up with ideas? (4)

Answer 1

Brainstorming, competitors, intrapreneurship and import substitution

Question 2

Brainstorming

Answer 2

Involves writing down a list of new ideas, rejecting the ones that won’t work and following the ones that do

Question 3

Competitors

Answer 3

Involves copying a product that already exists. Be careful of copyright and patents

Question 4

Intrapreneurship

Answer 4

Involves employees inside a business coming up with a suggestion to improve the business

Question 5

Import substitution

Answer 5

A product that is currently imported being made in Ireland

Question 6

What is market research?

Answer 6

The gathering and analysis of information about consumer opinion to help a business make informed decisions

Question 7

What is the aim of market research?

Answer 7

The ensure the business creates a product or service that customers need or want

Question 8

What are the benefits of market research? (5)

Answer 8

• Understand the demand for the product (how many would buy?)
• Understand what the consumer likes/ dislikes about the product (feedback can inform changes)
• Understand the best price to charge (how much will consumers pay?)
• Gain new information about the competition (how to stand out?)
• Understand the best promotion methods to use (consumer reaction?)

Question 9

What is a target market?

Answer 9

A group of people who all need or want a particular product/ service. It is who a product/ service is aimed at
EG The target market for computer games might be young males aged 8 - 18

Question 10

What is desk research?

Answer 10

Involves looking at information that is already available. It is also called Secondary Research as the information has already been gathered for another purpose

Question 11

Examples of desk research:

Answer 11

• Internet research (competitors websites)
• Central Statistics Office [CSO] (find population/gender/age of particular location)
• Sales reports (previous sales / what is popular)
• Newspapers (consumer trends EG healthy eating)

Question 12

Advantages of desk research

Answer 12

Quick to collect as information is already available

Easy to collect as information is already available

Cheap (no need to hire someone to collect information)

Question 13

Disadvantages of desk research

Answer 13

Information may not be relevant or useful to business

Information may be outdated or inaccurate

Information overload may occur (large volume of information available)

Question 14

What is field research?

Answer 14

Involves going into the marketplace to gather information first-hand from your target market. Also called Primary Research as you are making direct contact with potential customers

Question 15

Examples of field research:

Answer 15

1. Surveys/ Questionnaires
2. Observation
3. Focus groups

Question 16

1. Survey/ Questionnaire

Answer 16

This involves questioning customers about the product or service. Questions should be clear and not lead the consumer.

Surveys can be completed online, telephone, face-to-face or postal

Question 17

Types of survey questions:

Answer 17

Closed question: Yes/ No
Multiple choice question: consumer picks between options listed
Open ended question: consumer has option to say what they like

Question 18

Advantages of surveys:

Answer 18

Consumers answer in their own time

Detailed information provided

Question 19

Disadvantages of surveys:

Answer 19

Dishonest responses

Low response rate (especially online and telephone)

Question 20

Survey tips:

Answer 20

• Brief (limit 10 questions)
• Realistic (avoid too many open ended questions)
• Persistent (send polite reminder email)

Question 21

Observation:

Answer 21

This involves watching the consumer in action

EG the number of consumers picking a specific product at a particular time of day OR the time it takes to sell a product

Question 22

Advantages of observation:

Answer 22

Large number of people can be observed

Cheap

Question 23

Disadvantages of observation:

Answer 23

Time consuming

Limited information gained- for example, you know what product was chosen but not why

Question 24

Focus group:

Answer 24

A group of consumers brought together to discuss a product or service

Question 25

Advantages of focus groups

Answer 25

Large number of opinions collected

Question 26

Disadvantages of focus groups:

Answer 26

One group member may dominate conversation