Topic Area 2

Cards (25)

  • What are the purposes of market research?
    -To reduce risk: prevents incorrect decisions
    -To aid decision making: helps make good, informed decisions
    -To understand the market: identify market gaps; adapting their product
    -Gain customer views/understand their needs and wants: Helps them develop a product to suit their target market
    -To inform product development: what might need changing to become more desirable
    -Understand competitors: Make a product more appealing with a USP
  • What is Primary market research?
    Collecting first-hand data that has not been collected before
  • What are examples of primary market research?
    -Observations
    -Focus Groups
    -Consumer Trials
    -Test Marketing
    -Questionnaires/surveys
  • What are observations + advantages/disadvantages?
    -Watching and recording customers
    -Advantages: Cost little; easy to do; can see what people do rather than what they say they do
    -Disadvantages: Time-consuming; people change their behaviour when being watched; not clear why their behaviour is happening
  • What are focus groups + advantages/disadvantages?
    -An interview with a small group of chosen people
    -Advantages: Allows for a deeper insight into peoples preferences; participants can be selected
    -Disadvantages: Some participants may be more dominant; only a small number of participants, limited data
  • What are consumer trials + advantages/disadvantages?
    -When a customer is given a sample product to try
    -Advantages: Feedback is directly relevant; can be very reliable and honest; a trial is cheaper than a full launch so it minimises risk
    -Disadvantages: Expensive to give away free products; competitors may copy the product; results are only based on a small sample
  • What is test marketing + advantages/disadvantages?
    -Products may be launched in one region for a short period or time to test customer reaction
    -Advantages: Reduces the financial risk of a full launch; feedback is relevant and reliable; can target specific customers/areas
    -Disadvantages: Results may be mislead as they are based on a small sample; competitors may hear about the product and launch a similar product first
  • What are questionnaires/surveys + advantages/disadvantages?
    -Questionnaires: Set of questions to find out people's opinions
    -Surveys: Process of collecting data based on questionnaire responses
    -Advantages: Questions are planned to gather relevant, up-to-date data; data can be easy to analyse; can be done in several formats; online surveys are cheap
    -Disadvantages: People may not answer honestly/complete survey; can be expensive; can be time-consuming
  • What is Secondary Market research?
    Collecting data that already exists
  • What are examples of secondary market research?
    -Internal data
    -Books/newspapers
    -Trade magazines
    -Competitors' data
    -Government publications/statistics
    -Market research reports
  • What is internal data + advantages/disadvantages?
    -Historical information that the business already has
    -Advantages: Free to access; relevant to the business; private to the business; can help predict what might happen in the future
    -Disadvantages: May be unreliable/out-of-date; no new knowledge
  • What are the advantages + disadvantaged of using books and newspaper for market research?
    Advantages: Access is easy; Newspapers are published regularly
    Disadvantages: Older books and newspapers may be out-of-date; may be biased
  • What are trade magazines + advantages/disadvantages?
    -Magazines aimed at professionals of a specific industry
    -Advantages: Information is specific to the industry; relevant
    -Disadvantages: Subscriptions can be expensive
  • What is competitors data + advantages/disadvantages?
    -Information about the competitors' business that is publicly avaliable
    -Advantages: data is relevant as it is industry specific; helps with understanding what competitors are doing
    -Disadvantages: Not all information may be released
  • What are government publications and statistics + advantages/ disadvantages?
    -Published research, polls and surveys carried out by the government
    -Advantages: High-quality, accurate research; free and easy to access
    -Disadvantages: Might be out of date; information may be biased
  • What are market research reports + advantages/disadvantages?
    -Professional market researchers carry out research on specific topics
    -Advantages: Accurate and specialist information
    -Disadvantages: May not be suitable; may be expensive to view
  • What are the advantages of primary market research?
    -Results are tailored to the specific needs of the business
    -Information is not shared with competitors
    -Information is up-to-date
  • What are the disadvantages of secondary market research?
    -Time-consuming to collect data
    -May distract entrepreneurs from other aspects of their business
    -Can be expensive to carry out
  • What is quantitative data?
    -Data measured in numbers and percentages
    -Gathered by asking closed questions
  • What are the advantages and disadvantages of quantitative data?
    Advantages: Easy to analyse; can be presented as graphs/charts
    Disadvantages: Does not give specific opinions; does not allow entrepreneur to understand customers' thoughts
  • What is qualitative data?
    -Consists of people's opinions and points of view
    -Gathered from open-ended questions
  • What are the advantages and disadvantages of qualitative data?
    Advantages: Detailed insight into customers views; valuable detailed information for developing a product
    Disadvantages: Too many different opinions, costly to collect, more time to analyse
  • What is market segmentation?
    The process of dividing a market into distinct groups of consumers with similar needs, characteristics, or behaviours.
  • What are the 6 types of market segmentation?
    -Age
    -Gender
    -Occupation
    -Income
    -Location
    -Lifestyle
  • What are the benefits of market segmentation?
    -Ensure customers needs are met and matched: Businesses can alter the product to suit particular people
    -Increase sales and profit: Customers are more likely to purchase a product that meets their needs; saves money
    -Target the right product at the right customer: Saves money on promotion and makes it more effective
    -Increase customer retention and loyalty: Customers will come back to a product that meets their needs.
    -Increase market share