Understanding Markets and Customers

Flashcards for AQA A-Level Business - Understanding Markets and Customers

Primary Research

Data collected first-hand for a specific research purpose

Secondary Research

Data that already exists and which has been collected for a different purpose

Focus Group

A form of qualitative research in which a group of people are asked about their perceptions, opinions, beliefs, and attitudes towards a product, service, concept, advertisement, idea, or packaging.

Quantitative Data

Based on numbers and figures; answers questions such as ‘how many?’, ‘how often’, ‘who?’, ’when?’ and ‘where?’

Qualitative Data

Based on opinions, attitudes, beliefs and intentions; answers questions such as ’why?’, ‘would?’ or ‘how?’

Market Size

Indicates the potential sales for a firm

Market Growth

A key indicator for existing and potential market entrants

Market Share

Explains how the overall market is split between the existing competitors

Sampling

Involves the gathering of data from a sample of respondents, the results of which should be representative of the population as a whole

Random Sampling

Every member of a population has an equal chance of being selected

Quota Sampling

Respondents are selected based on specific characteristics, such as age, income or location

Stratified Sampling

The researcher divides or 'stratifies' the target group into sections, each representing a key group (or characteristic) that should be present in the final sample

Correlation

Looks at the strength of a relationship between two variables

Positive Correlation

A positive relationship exists where as the independent variable increases in value, so does the dependent variable

Negative Correlation

A negative relationship exists where as the independent variable increases in value, the dependent variable falls in value

No Correlation

There is no discernible relationship between the independent and dependent variable

Confidence Interval

A confidence interval gives the percentage probability that an estimated range of possible values in fact includes the actual value being estimated

Extrapolation

Uses trends established from historical data to forecast the future

Elasticity

Measures the responsiveness of demand to a change in a relevant variable, such as price or income

Price Elasticity of Demand (PED)

Measures the extent to which the quantity of a product demanded is affected by a change in price

Income Elasticity of Demand (YED)

Measures the extent to which the quantity of a product demanded is affected by a change in income