Market Research

Question 1

Primary Market Research Definition

Answer 1

Primary marketing research collects and analyses data for the first time to use for marketing purposes

Question 2

Secondary Market Research Definition

Answer 2

Secondary marketing research collects and analyses data that already exists for marketing purposes

Question 3

Target Population Definition

Answer 3

Target population is all the items or people that are relevant to the market research being undertaken.

Question 4

What is a Sample in market research?

Answer 4

A sample is a group of people or items selected to represent the target population

Question 5

Competitiveness Definition

Answer 5

Competitiveness measures the extent to which a business offers good value for money relative to competitors.

A business is competitive if it offers better value for money than rivals.

Question 6

Give examples of secondary market research

Answer 6

• Reading newspapers to learn the market

• Look at the annual reports produced by companies

• Study information produced by the government

Question 7

What are the pros and cons of secondary market research?

Answer 7

Pros:
• Already available and therefore it’s cheap

Cons:
• May not be in the exact format that a business required

• Could be out of date

Question 8

Give examples of primary market research

Answer 8

• Observe shoppers’ behaviour through CCTV footage

• Interview customers face to face

• Send out questionnaires or have online surveys

• Focus Groups

Question 9

What are the pros and cons of primary market research?

Answer 9

Pros:
• Specific to business
• Provides detailed information
• Relevant and up to date
• Quantitative and Qualitative data

Cons:
• Time consuming
• Expensive
• Difficult to collect

Question 10

What is Market Mapping?

Answer 10

Market mapping analyses market conditions to identify the position of one product or brand relative to others in the market in terms of given criteria

Data formed on a cross axis
e.g.
x axis = low price, high price
y axis = modern, traditional

Question 11

What tools can managers use to interpret market data?

Answer 11

• correlation
• extrapolation
• confidence intervals

Question 12

Example of negative correlation?

Answer 12

Price and demand

When price goes up, demand falls

Negative correlation, when one factor goes up the other goes down

Question 13

Examples of positive correlation?

Answer 13

Income and demand

When income goes up, demand goes up

Positive correlation, when one factor goes up the other also goes up

Question 14

How does correlation help a manager interpret market data?

Answer 14

Identifying key influences on demand then it can help forecast sales in the future

e.g
if it’s becoming sunny, sell more sunglasses

Question 15

What are correlation values?

Answer 15

Correlation is given as a value between -1 and +1

Higher figure = stronger correlation

0 = no correlation

Question 16

What is extrapolation?

Answer 16

Forecasting sales by looking at what has happened in the past and continuing this trend into the future.

e.g
if sales grown by 2% a year for the past 5 years, then businesses may extrapolate sales forward on this data.

Question 17

What is a confidence level?

Answer 17

A confidence level is the probability that the research findings are correct

Question 18

What is a confidence interval?

Answer 18

A confidence interval is the possible range of outcomes for a given confidence level.

e.g.
95% confidence level that sales will be between £500,000 and £700,000 (interval)

Larger interval = Higher confidence level

Question 19

What will the degree of confidence in data findings depend on?

Answer 19

• Size of the sample
• How the sample was constructed, was it random selection?

Question 20

How can market research in sales affect a businesses plans and decisions?

Answer 20

Sales forecast:
- production levels
- cashflow forecast
- staffing levels
- marketing budgets