What is market research?
The process of collecting, recording, and analysing data about customers, competitors, and the market
It reduces the risks associated with developing a new business idea.
List the specific purposes of market research data.
- Quantify potential demand
- Identify and anticipate customer needs and wants
- Understanding consumer behaviour
These purposes help businesses forecast sales and understand customer preferences.
What are the two main types of market research?
- Primary research (field research)
- Secondary research (desk research)
Each type serves different data collection needs.
Define primary research.
The collection of ‘first-hand’ data directly related to a firm’s needs
It involves fieldwork and is tailored to the individual business.
What are the methods of collecting primary data?
- Questionnaires
- Personal interviews
- Telephone surveys
- Observation
- Online surveys
- Consumer panels
- Focus groups
- Field trials
- Test marketing
Each method has its own advantages and limitations.
What are the two types of questions used in questionnaires?
- Open questions
- Closed questions
Open questions encourage detailed responses, while closed questions require specific answers.
List the advantages of primary research.
- Specific to the business’s needs
- Up-to-date information
- More accurate and reliable
- Better understanding of customer opinions
These advantages help businesses make informed decisions.
List the disadvantages of primary research.
- Time-consuming
- Expensive to carry out
- Limited sample size
- Risk of poor-quality data
These disadvantages can hinder effective data collection.
Define secondary research.
The collection of data from second-hand sources that has been gathered previously by another organization
It uses data that is publicly available.
What are some internal sources of secondary data?
- Sales figures
- Customer records
- Trend data
- Sales reports
These sources provide insights into the business’s own performance and customer behavior.
What are some external sources of secondary data?
- Government publications
- Directories
- Marketing research agencies
- Trade organizations
- Websites
- Social media
- Databases
These sources provide broader market insights.
List the advantages of desk research.
- Quick to access
- Low cost
- Good for general information
- Easy to compare over time
These advantages make desk research a practical option for businesses.
List the disadvantages of desk research.
- May be out of date
- Not specific to the business
- Lack of accuracy or reliability
- Competitors may use the same data
These disadvantages can limit the effectiveness of desk research.
What is the difference between quantitative research and qualitative research?
- Quantitative research: collection of measurable data
- Qualitative research: collection of data about attitudes, beliefs, and intentions
Each type serves different research objectives.
How can ICT support market research?
- Company websites gather visitor data
- Social media provides consumer attitudes
- Database technology captures consumer behavior patterns
These technologies enhance data collection and analysis.
What is sampling in market research?
Collecting data from a group of people representative of the target market
The sample size impacts the accuracy and cost of the research.
List the types of sampling methods.
- Simple random sampling
- Stratified sampling
- Quota sampling
Each method has its own approach to selecting participants.
Define stratified sampling.
A method where the population is divided into groups based on shared characteristics, and a sample is taken from each group
This ensures balanced representation in the sample.
Define quota sampling.
A method where certain types of people are included in the sample in the right proportions, selected non-randomly
It ensures representation while being faster and cheaper.
List the limitations of sampling methods.
- Sample size too small
- Inappropriate sampling method
- Bias in methods
These limitations can affect the validity of research findings.
What is the impact of a small sample size on opinions sought?
Limited opinions
A smaller sample size restricts the diversity of opinions gathered.
What is the consequence of using an inappropriate sampling method?
Limited to particular groups
Some products may only appeal to specific demographics.
What does bias in sampling methods mean?
Not a fair mix of the whole population
Biased results can lead to wrong decisions, as they do not accurately represent the views of the entire population.
True or false: A larger sample size always leads to greater costs.
TRUE
While larger samples can provide more accurate results, they also incur higher costs.
