Primary Research

Question 1

What is Primary Research? (2)

Answer 1

It involves collecting new data that is specific and up to date to the business

Question 2

What is the benefit of Primary Research? (8)

Answer 2

1. Involves Collecting new data and specific to the business
2. Eg. Questionnaires/Focus Groups
3. Allows to effectively Meet Wants and Needs
4. Create a product to meet Wants and Needs
5. Increase Loyalty
6. Price Inelastic
7. Can Increase price without a fall in demand
8. Increase Profit margins to reinvest

Question 3

What is the Drawback of Primary Research? (10)

Answer 3

1. Primary Research is expensive
2. May need researchers
3. Eg. Questionnaires / Focus groups from a large sample
4. To meet customer wants and needs
5. Increased Cash Outflows on wages
6. May lead to a lower net cash flow
7. Less Cash Reserves
8. Poor Liquidity (Acid Test Ratio)
9. Can’t pay day to day bills
10. Forced to sell non current assets and therefore can’t operate