What does starting a business/launching a new product involve?
Significant upfront costs
List three examples of significant upfront costs
- Product development
- Equipment and premises
- Marketing
Explain market research [2]
- Process of gathering data in order to understand the current and future customer needs
- Helps reduce risk in developing a new idea
How can market research reduce risk? [5]
- Quantify potential demand
- Understand how much people will pay
- Study competitors and USPs
- Identify key features of the business environment
- Understand customer behaviour
What is primary research?
Dara collected first-hand, often referred to as field research
List two positives of primary research [2]
- Specific to business
- Detailed opinions and beliefs
List two negatives of primary research [2]
- Time consuming
- Costly
Explain secondary research
Collection of data using research or information provided by others, often referred to as desk research
List two positives of secondary research [2]
- Quicker
- Cheaper
List two negatives of secondary research [2]
- Not specific to business
- Potentially out of date
What are questionnaires? [3]
- Qualitative or quantative
- Question sheet filled by the consumer
- Primary research
Positives and benefit of questionnaires [4]
- Cheaper than interviews
- Targets specific people
- Low completion rate
- People may lack understanding
What are focus groups? [3]
- Qualitative
- Selected small groups f customers who give their opinions on products
- Primary research
Positives and negatives of focus groups [4]
- Data is specific to group/business
- Detailed feedback
- Expensive compared to questionnaire
- Time consuming and costly
Explain observation as a method of primary research [4]
- Qualitative
- Watching and studying the actions of customers, suppliers and rivals
- Counting footfall, watching customer behaviour and spotting gaps in the market
- Primary research
List pros and cons of observation [4]
- Quick and simple
- generally free, cheap
- Observer bias
- Time consuming
Explain test marketing as a method of primary research [3]
- To test whether customers will buy a product
- Product or service will be sold for a short time in a certain area
- Quantitative
List pros and cons of test marketing [4]
- Reduces risk, less expensive than a full launch
- Identifies if there is demand
- Trials are costly to set up
- Time consuming process
Explain market reports as a method of research [4]
- Secondary research
- Organisations producing reports on trends in the market
- Usually collated and then sold to businesses in easy to understand reports
- Quantitative
List pros and cons of market reports [4]
- Saves time/costs
- Provides detailed insights
- May be outdated
- Lack of specificity
Explain government data as a method of research [4]
- Secondary research
- Info collected by the gov on how people live, income, etc
- The Census data collected every 10 years
- Quantitative
List pros and cons of government data [4]
- Free (cheap)
- Easy to access
- Info may not be specific to business
- Out of date
Explain economic historic data [3]
- Trends in the wider economic climate
- Quantitative
- Secondary research
List pros and cons of economic historic data [4]
- Identify trends
- Reduce risk
- Out of date
- Lack of specificity
