U3- Market Research

Question 1

What are the 2 categories of methods for gathering market research?

Answer 1

Field research (primary) where the business collects information itself

Desk research (secondary) the business uses someone else’s information for its own purpose

Question 2

Name 6 field methods

Answer 2

Personal interview

Postal survey

Telephone survey

Hall test

Consumer audit

Test marketing

Question 3

Name 4 desk sources

Answer 3

Government statistics

Newspapers/ magazines

Trade journals

Internet

Question 4

Describe field research

Answer 4

More expensive and time consuming to collect

A large enough sample must be taken to ensure its accuracy

However it should be more accurate than desk research and will be up to date

Question 5

What does the market research method depend on?

Answer 5

The finance available

How quickly the information is needed

How accurate or precise the information needs to be for the decision to be made

Question 6

Describe a personal interview/ street survey

Answer 6

Stopping people in the street or visiting them at home

Street surveys are often briefer and do not allow for as many follow up questions

Question 7

Give 4 advantages of street survey/ personal interview

Answer 7

Allows the organisation to directly gain the views of customers

Allows 2 way communication between the interviewer and interviewee

The interviewer can clarify any questions to aid understanding

Specific market segments can be targeted

Question 8

Give 4 disadvantages of street survey/ personal interview

Answer 8

Interviewers have to be trained to ensure accurate information is received

It can be time consuming

Very expensive method as it can be labour intensive to collect and analyse the data

People don’t like to be stopped in the street or disturbed at home

Question 9

Describe a postal survey

Answer 9

This involves sending out questionnaires by post for people to complete and return

Question 10

Give 4 advantages of postal survey

Answer 10

Survey forms can be sent out to all customers

Reaches a large geographical area

Focus can be on customers in a targeted area

Relatively cheap method

Question 11

Give 4 disadvantages of postal survey

Answer 11

Usually has a very poor response rate as can be seen as junk mail

May have to add incentives such as a prize to get a response

Questions need to be fairly simple and easily understood

Design costs may be high

Question 12

Describe a telephone survey

Answer 12

Phoning people at home or work to ask their opinions

Question 13

Give 4 advantages of telephone survey

Answer 13

Instant feedback from customers

Focus can be on certain groups of customer

Can be used as part of after sales service

Large numbers can be contacted quickly

Question 14

Give 4 disadvantages of telephone survey

Answer 14

Sometimes gains a hostile response from the person called

People are often unhappy with being called at home

Cold calling can lead to poor business reputation

There are increased legal restrictions on cold calling

Question 15

Describe a hall test

Answer 15

A large number of consumers are invited to comment on a range of products

Question 16

Give 3 advantages of a hall test

Answer 16

Gives consumers the change to give feedback and to try a product

Allows the product to be demonstrated

Fairly cheap method

Question 17

Give 2 disadvantages of hall test

Answer 17

Can be difficult to analyse qualitative information

Consumers often give favourable replies simply to be polite

Question 18

Describe consumer audit

Answer 18

This is the process of determine who your ideas customer is, measuring their real experience with your product and using that data to make decisions which will enhance customer experience

Question 19

Give 2 advantages of consumer audit

Answer 19

Can provide accurate information on consumer buying patterns

Can be used to predict consumer trends

Question 20

Give 3 disadvantages of consumer audit

Answer 20

Consumers get fed up quickly resulting in high turnover of respondents and in accurate data

Consumers may not compete the journals accurately or on time

Very expensive method as some consumers receive payments to complete diaries

Question 21

Describe test marketing

Answer 21

This involves selling the new product in one small market sector before launching it fully into the wider market

Question 22

Give 2 advantages of test marketing

Answer 22

Allows for the product to be amended or improved before a national launch

Saves the cost of a national launch if the product doesn’t receive good reviews in the test market

Question 23

Give a disadvantage of test marketing

Answer 23

Regional tastes may not represent the nation as a whole

Question 24

Describe observation

Answer 24

Watching how consumers shop and behave in store and their reactions to products on display

Question 25

Give 2 advantages of observation

Answer 25

Provides accurate quantitative information

There is no direct contact with customers so no bias can be introduced

Question 26

Give a disadvantage of observation

Answer 26

Cannot clarify any situations or ask for explanations

Question 27

Describe an internet survey

Answer 27

Businesses can now contact customers directly once they have made a purchase online

Question 28

Give 3 advantages of internet survey

Answer 28

Customers are more likely to respond as it is less hassle to fill in a questionnaire online

Business can create a data base of customers details to help analyse the results

Lower cost than many other methods

Question 29

Give 3 disadvantages of internet survey

Answer 29

Cost of designing the online questionnaire can be high

Customers may still not respond

Can end up in spam folder

Question 30

Describe social media

Answer 30

Many businesses now have teams set up to monitor comments on products that appear on social media

Question 31

Give 3 advantages of social media

Answer 31

Usually honest opinions are likely to be seen

No direct contact with customer is needed

Businesses can respond quickly to negative comments

Question 32

Give 2 disadvantages of social media

Answer 32

Costly to set up and run

Information will be available to competitors

Question 33

Give 2 advantages of loyalty cards

Answer 33

Up to date information on consumer buying habits is obtained

Can encourage customers to remain loyal to the store

Question 34

Give 2 disadvantages of loyalty cards

Answer 34

Expensive to set up and run

Need to provide discounts to encourage customers to keep using them

Question 35

Give 4 facts about mystery shopper

Answer 35

Conducts undercover research to gain a realistic customer experience

Can give immediate feedback to management or employee

May be used to asses competitors services

Used primarily to discover areas of weakness or praise strengths

Question 36

Describe desk research

Answer 36

Can give the business detailed information about market conditions and changes in the external environment

Can be obtained quickly and cheaply however its value is limited

The information is difficult to verify, so decisions based on it could be wrong

The information is also available to competitors so the business doesn’t gain any competitive advantage

Question 37

Give 4 ways that organisations can use market research

Answer 37

Use feedback to ensure marketing is targeted at the correct sector

Use the internet to gain a better understanding of the size and profile of the market

Ask opinions and use these to make alterations to existing products

Use feedback to enter into new markets or increase market share

Question 38

What is quota sampling?

Answer 38

When those chosen to be surveyed are selected in proportion to the whole population by age, social status etc

This type of survey is preferred when carrying out research

Question 39

Give 3 advantages of quota sampling

Answer 39

Cheaper as it needs fewer resources

Statistics are available showing the proportions of different groups within the population that are readily available

Interviewers can substitute someone else if the interviewee is not at home at the time of the visit or phone call

Question 40

Give 2 disadvantages of quota sampling

Answer 40

Results can be less representative than using the random sampling method

It is easier to introduce bias which may impact the results