4.4

Question 1

Market Research

Answer 1

The systematic gathering, recording and analysing by those who provide goods and services of data about customers, competitors and the market.

Question 2

Importance of Market Research

Answer 2

• Reduce risk associated with new product
• Identify and predict future demand changes
• Identify market segment buying the organisation’s products
• Discover how much customers are willing to pay
• Identify which competition exists
• Discover which promotion is appropriate

Question 3

Methods of Market Research: Field

Answer 3

Information collected by the organisation itself or by a paid market research agency. First-hand data directly related to a firm’s needs. Known as PRIMARY information.

Question 4

Methods of Market Research: Desk

Answer 4

Information already collected for another purpose (government statistics). Known as SECONDARY research.

Question 5

Advantages Field Research

Answer 5

• Should be correct for the purpose for which it was gathered
• Can be kept private and can provide a competitive advantage
• Source of the information is known, more reliable

Question 6

Field Research Disadvantages

Answer 6

• Costs can be high
• Research may be flawed (sampling bias)
• May be difficult and time consuming to gather

Question 7

Desk Research Benefits

Answer 7

• Can be inexpensive and easy to access
• A wide variety of sources can be accessed

Question 8

Desk Research Costs

Answer 8

• Research may not be relevant to organisations problem as it was collected for another purpose
• May be out of date
• Available to competitors

Question 9

Types of information generated by market research

Answer 9

Quantitative information
Qualitative information

Question 10

Quantitative information

Answer 10

Information that is definable:
- Numerical
- Can be measured
- Useful for making comparisons
- E.g. sales figures increased by 10%

Question 11

Qualitative information

Answer 11

Information that is descriptive:
- Concerned with peoples feelings and emotions
- Useful when analysing people’s views on a product
- E.g. I prefer a big car

Question 12

Methods of Primary Research

Answer 12

Involves the use of data which does not already exist and must be collected from scratch:
Surveys
Postal Surveys
Telephone Survey
Online Survey
Interviews
Focus Groups
Observation
Test Marketing

Question 13

Surveys

Answer 13

Involve directly asking consumers -using a questionnaire- for their opinions and preferences. Both quantitative and qualitative data is gathered.
It is impossible and too expensive to ask all potential mombers of the target market so a sample is taken.

Question 14

Designing a questionnaire

Answer 14

Must be written with an ibjective in mind. Must:
- Have an easy layout
- Be short and relevant
- Be clear
- Have questions in logical order

Closed questions: the interviwee is given a limited number of answers, easy to analyse and generate quantitative information.

Open questions: the interviewee is free to give any response, difficult to analyse and generate qualitative information.

Question 15

Interviews

Answer 15

• The response rate in most forms of self-completed questionnaires is nearly always poor, questions can be misunderstood.
• Direct interviews are conducted by an interviewer, usually in the street or respondents home. This will avoid bias and follow up questions can be asked.
• This method can be expensive but the interviewer will continue their work until the pre-set sample size has been reached.

Question 16

Focus Group

Answer 16

Groups of consumers are brought together to answer questions or try products.
- Led by market researchers on behalf of a business.
- All members are free to talk
- The discussion is often filmed
- Researches might lead or influence the conversation, leading to biased conclusions

Question 17

Observation

Answer 17

Consumers are watched whilst in the store. Market researchers look at how long it takes customers to decide on a purchase and how they interact with displays in the store.
- Using cookies or web trackers to see users’ web views and visits
- The observer is unseen so customers behave in natural way
- Time consuming and does not provide qualitative evidence explaining consumers’ behaviour

Question 18

Methods of Secondsry Research

Answer 18

Market Intelligence Analysis Reports
Academic Journals
Government Publications
Media Articles
The Internet
Internal Company Records

Question 19

Market Intelligence Analysis Reports

Answer 19

Extremely detailed reports on individual markets and industries produced by specialist market research agencies. Sold directly to businesses in the market being researched.

Question 20

Academic Journals

Answer 20

Academic research conducted by universities that may offer insight into new production methods or new approaches to market research. Subscriptions are required to access.

Question 21

Government Publications

Answer 21

Quantitative and qualitative data published by the government such as population census, living costs, social trends. Free to access but not produced yearly.

Question 22

Media Articles

Answer 22

Journalism broadcasts on a range of topics that may provide insights into the market and highlight current trends.

Question 23

Ethical considerations of Market Research

Answer 23

• Researchers should have the permission of the people who they will be studying to conduct research
• Data collection should not cause physical or emotional harm to individuals
• There shouldn’t be personal bias
• Respondents should be aware wether the responses will be kept anonymus

Question 24

Methods of Sampling

Answer 24

Random Sampling
Quota Sampling
Stratified Sampling
Cluster Sampling
Snowball Sampling
Convenience Sampling

Question 25

Random Sampling

Answer 25

The sample is selected at random. Every member of the target population has an equal chance of being selected. Need: - A list of all the people in target population - Sequential numbers given to each member of this population - A list of random numbers generated by computer

Question 26

Random Sampling Advantages

Answer 26

- No bias involved in selection - Sample will be representative of the population

Question 27

Rameon Sampling Disadvantages

Answer 27

The individuals selected must be interviewed, if one doesn’t answer, another list needs to be generated and new participants have to be interviewed.

Question 28

Quota Sampling

Answer 28

Involves the population being segmented into mutually exclusive subgroups which share specific characteristics (gender, age, income, marital status). It is the researcher’s job to find and interview the people who fit the categories required.

Question 29

Quota Sampling Benefit

Answer 29

- Provides a more targeted method of sampling - Is cheaper than random sampling - Good for obtaining the views of a particular market segment

Question 30

Quota Sampling Disadvantages

Answer 30

May be time consuming to find interviewees who represent each market segment.

Question 31

Stratified Sampling

Answer 31

Draws a sample from a specified segment of the population and uses random sampling to select an appropriate number for each stratum.

Question 32

Stratified Sampling Benefits

Answer 32

Makes the sample more representative of the population.

Question 33

Stratified Sampling Disadvantages

Answer 33

Requires more administration, effort and time to carry out.

Question 34

Cluster Sampling

Answer 34

Using one or a number of specific groups to draw samples from and not selecting from the whole population. E.g. using one town or region. ✅ Helps reduce costs ❌ It may not be fully representative of the whole population

Question 35

Snowball Sampling

Answer 35

Using existing members of a sample study group to recruit further participants through their acquaintances. ✅ It is cheap and can be operated through social networks ❌ It is likely to lead to a biased sample

Question 36

Convenience Sampling

Answer 36

Drawing a representative selection of people because of the ease of their volunteering or selection people because of their availability or easy access. ✅ Availability and quickness of which data can be gathered ❌ Is unlikely to represent the population as a whole and is likely to be biased

Question 37

Problems with Market Research

Answer 37

Sampling Bias Human Behavious: opinions change Interviewer Bias

Question 38

Sampling Bias

Answer 38

Results from a small group may turn out to be completely different from the reactions of the wider population.

Question 39

Interviewer Bias

Answer 39

The interviewer may have lead the interviewee into saying what they think the interviewer wants them to say.