Market research

Question 1

Purpose of market research (4)

Answer 1

Identify gaps in the market
Reduce risk
Identify and understand customer needs
Inform business decisions

Question 2

Define:
Market-
Competition-
Market segment-

Answer 2

-place where consumers and producers meet to sell and purchase goods and services
-when businesses sell similar products
-how the market is divided on groups of consumers with similar habits

Question 3

Market share-

Answer 3

Proportion of sales that in a market are taken by one business

Question 4

Primary research (5)

Answer 4

-data collected first-hand for specific purpose

Focus groups
Surveys
Questionnaires
Interview
Observation

Question 5

Secondary research (3)

Answer 5

-data that has already been collected for a different purpose

Internet
Government reports
Market reports

Question 6

Benefits of primary research (3)

Answer 6

Very specific
Kept private
More detailed insights

Question 7

Benefits of secondary research (3)

Answer 7

Free, easy to obtain
Good source of market
Quick to access and use

Question 8

Drawbacks of primary research (3)

Answer 8

Time consuming
Risk of being biased
Sampling may not be representing the whole population

Question 9

Drawbacks of secondary research (3)

Answer 9

Quickly become out of date
Not tailored for business purposes
Often quite expensive

Question 10

Quantitive and qualitive data are -

Answer 10

-numerical data, various forms of surveys
-based on opinions, attitudes, beliefs (focus groups, interviews)

Question 11

Qualitive data benefits (4)

Answer 11

1. Essential for important new product development
2. Focused on understanding customer wants, needs
3. Highlight issues that need addressing
4. Effective way of testing elements of marketing mix

Question 12

Qualitive data drawbacks (3)

Answer 12

1. Expensive to collect and analyse
2. Based around opinions, do not represent population
3. Require research skills

Question 13

Quantitive data benefits (3)

Answer 13

1. Data relatively easy to analyse
2. Provides insights into relevant trends
3. Can be compared with data from other sources (competitors)

Question 14

Quantitive data drawbacks (2)

Answer 14

1. Focuses on data rather than explaining why things happen
2. May lack reliability if sample size and methods are not valid

Question 15

Market segmentation (3)

Answer 15

Location
Demographics
Income

Question 16

Benefits of market segmentation (4)

Answer 16

1. Better matching a product to customer needs
2. Help with new product development - focused on needs of the customers in the segment
3. Allows a business to grow its shares in a market or effectively target fast-growing segments
4. Helps make the marketing mix more effective e.g. better targeting promotion

Question 17

Drawbacks of marketing segmentation (3)

Answer 17

1. Imprecise science
2. It does not mean it can successfully reach the customers in it
3. Markets are dynamic and fast-moving

Question 18

Market mapping advantages (4)

Answer 18

1. More informed business decisions
2. Can identify gaps in the market
3. Can see their competitors is comparison
4. Identify where demand is higher => more competitive areas

Question 19

Market mapping disadvantages (3)

Answer 19

1. Quickly goes out of data
2. False information
3. Requires skills to be more precise at building it