Business Unit 1 ALL

What is market research?

Gathering, presenting, and analysing information about products and customers

What is the difference between needs and wants?

Needs are unavoidable requirements (e.g. food, water); wants are individual preferences where consumers exercise choice

Name three core purposes of market research

Any three from: identify customer needs and wants, quantify likely demand, gain insight into consumer behaviour, reduce risk, understand pricing willingness, analyse competitors and the external environment

What is primary market research?

Obtaining data firsthand by the business to match its specific needs

What are the main advantages of primary research?

Tailored data, competitive advantage (exclusive access), and fills gaps when secondary data is unavailable

What are the main disadvantages of primary research?

High cost, time-consuming, and risk of flawed methodology making data inaccurate

What is secondary market research?

Data collected by another business or organisation but used by the business in question

What are the main advantages of secondary research?

Cheap and quick, allows cross-verification, useful for historical trends, and helps guide primary research

What are the main disadvantages of secondary research?

Not tailored to exact needs, may be out of date, and may contain bias

What is quantitative research data?

Numerical information that can be presented and analysed using graphs, charts, and tables

Give examples of quantitative data

Sales revenue, profit figures, employee numbers, market share percentage, customer satisfaction scores

What is a key limitation of quantitative data?

It does not explain the underlying reasons or “why” behind consumer preferences

What is qualitative research data?

Research relating to the opinions and beliefs of consumers (not presented numerically)

Give examples of qualitative data

Open customer comments, interview opinions, text reviews, brand reputation insights

What is a key advantage of qualitative data?

Provides deep insights into consumer behaviour, motivations, and attitudes

What is a questionnaire/survey?

A primary research method that combines open and closed questions to collect information

What is a key advantage of online surveys?

Cheap, quick, no printing costs, broad geographical reach, and rapid feedback

What is a key disadvantage of postal surveys?

Extremely low response rates

What are the main disadvantages of surveying family and friends?

High bias (may not give honest criticism), unrepresentative sample, and founders may lack research skills

What is a focus group?

A group of people who participate in a discussion to give feedback about a product or service

What is a consumer panel?

Similar to a focus group, but participants give feedback repeatedly over time

What is test marketing?

Trialling a product in a small area or with a limited number of users to assess its suitability

What is a key advantage of test marketing?

Allows late adjustments and reduces the risk of national launch failure

What is observation in market research?

Where market researchers watch the behaviour of customers

What is a key advantage of observation?

Records actual real-time behaviour rather than what people claim they will do

Name three secondary data sources

Any three from: market reports (e.g. MINTEL), government data, trade publications, databases, websites and social media

What are two advantages of using ICT in market research?

Increases speed and lowers costs; provides access to large global samples

What are two disadvantages of using ICT in market research?

Information overload and unrepresentative digital samples

What is a sample in market research?

A small group of people who represent a proportion of the total market

What is random sampling?

Every member of the target population has an equal chance of being selected

What is a key advantage of random sampling?

Reduces researcher selection bias

What is quota sampling?

The population is divided into subgroups and a set number of respondents is selected from each using convenience

What is a key advantage of quota sampling?

Faster and more cost-effective than random sampling

What is stratified sampling?

The population is divided into subgroups (strata) and a random sample is drawn from each in proportion to the population structure

What is a key advantage of stratified sampling?

Highly statistically representative of the overall target population

What is interviewer bias?

When the interviewer’s tone, body language, or opinion influences the respondent’s answers

What is a biased question?

A question worded in a way that leads the respondent toward a specific answer

What is respondent bias?

When respondents answer inaccurately, either intentionally or unintentionally

What is market research?

Gathering, presenting, and analysing information about products and customers

What is the difference between needs and wants?

Needs are unavoidable requirements (e.g. food, water); wants are individual preferences where consumers exercise choice

Name three core purposes of market research

Any three from: identify customer needs and wants, quantify likely demand, gain insight into consumer behaviour, reduce risk, understand pricing willingness, analyse competitors and the external environment

What is primary market research?

Obtaining data firsthand by the business to match its specific needs

What are the main advantages of primary research?

Tailored data, competitive advantage (exclusive access), and fills gaps when secondary data is unavailable

What are the main disadvantages of primary research?

High cost, time-consuming, and risk of flawed methodology making data inaccurate

What is secondary market research?

Data collected by another business or organisation but used by the business in question

What are the main advantages of secondary research?

Cheap and quick, allows cross-verification, useful for historical trends, and helps guide primary research

What are the main disadvantages of secondary research?

Not tailored to exact needs, may be out of date, and may contain bias

What is quantitative research data?

Numerical information that can be presented and analysed using graphs, charts, and tables

Give examples of quantitative data

Sales revenue, profit figures, employee numbers, market share percentage, customer satisfaction scores

What is a key limitation of quantitative data?

It does not explain the underlying reasons or “why” behind consumer preferences

What is qualitative research data?

Research relating to the opinions and beliefs of consumers (not presented numerically)

Give examples of qualitative data

Open customer comments, interview opinions, text reviews, brand reputation insights

What is a key advantage of qualitative data?

Provides deep insights into consumer behaviour, motivations, and attitudes

What is a questionnaire/survey?

A primary research method that combines open and closed questions to collect information

What is a key advantage of online surveys?

Cheap, quick, no printing costs, broad geographical reach, and rapid feedback

What is a key disadvantage of postal surveys?

Extremely low response rates

What are the main disadvantages of surveying family and friends?

High bias (may not give honest criticism), unrepresentative sample, and founders may lack research skills

What is a focus group?

A group of people who participate in a discussion to give feedback about a product or service

What is a consumer panel?

Similar to a focus group, but participants give feedback repeatedly over time

What is test marketing?

Trialling a product in a small area or with a limited number of users to assess its suitability

What is a key advantage of test marketing?

Allows late adjustments and reduces the risk of national launch failure

What is observation in market research?

Where market researchers watch the behaviour of customers

What is a key advantage of observation?

Records actual real-time behaviour rather than what people claim they will do

How can websites be used as a secondary research source?

Gather data from rivals’ websites, collect a wide range of information easily and cheaply, and use comparison websites to find the cheapest suppliers

What are the benefits of using social media for market research?

Cost-effective, provides in-depth insights into customers and brand appearance, shows emerging trends in real time, gives almost instant alerts to competitor activity, is fast, easy, free, has broad reach, and allows targeting of specific groups

How can newspapers and magazines be useful for secondary research?

Can assess the strength of competition and provide marketing data such as product sales statistics from trade journals

How can TV and radio be used for secondary research?

Documentaries about business or consumer behaviour can be helpful; businesses can analyse competitors’ adverts and see what products they offer and at what price

What kind of information can government reports provide?

Statistical information such as relative sizes of economic sectors, income levels in different countries, spending patterns in different regions, and methods of transport

Name three secondary data sources

Any three from: websites, social media, newspapers/magazines, TV/radio, government reports, market reports (e.g. MINTEL), trade publications, databases

What are two advantages of using ICT in market research?

Increases speed and lowers costs; provides access to large global samples

What are two disadvantages of using ICT in market research?

Information overload and unrepresentative digital samples

What is a sample in market research?

A small group of people who represent a proportion of the total market

What is random sampling?

Every member of the target population has an equal chance of being selected

What is a key advantage of random sampling?

Reduces researcher selection bias

What is quota sampling?

The population is divided into subgroups and a set number of respondents is selected from each using convenience

What is a key advantage of quota sampling?

Faster and more cost-effective than random sampling

What is stratified sampling?

The population is divided into subgroups (strata) and a random sample is drawn from each in proportion to the population structure

What is a key advantage of stratified sampling?

Highly statistically representative of the overall target population

What is interviewer bias?

When the interviewer’s tone, body language, or opinion influences the respondent’s answers

What is a biased question?

A question worded in a way that leads the respondent toward a specific answer

What is respondent bias?

When respondents answer inaccurately, either intentionally or unintentionally

What is product orientation?

When a business prioritises internal R&D, product design quality or engineering performance over direct consumer feedback

Give examples of product-oriented businesses

Apple iPhones, Gillette razors, Tesla, Sony Walkman

What is market orientation?

When a business prioritises identifying, understanding and meeting the needs and wants of target consumers through continuous market research

Give examples of market-oriented businesses

Audi, ASDA’s ‘Chosen by You’ range

What is a key risk of product orientation?

Developing products with little or no consumer demand, leading to unsold goods and losses

What is a key advantage of market orientation?

Higher customer satisfaction, ability to anticipate trends, and higher success rate for new product launches

What is market positioning?

The perception consumers hold about the quality, value for money and image of a product or brand relative to competitors

What is market mapping?

A two-dimensional grid that plots competing products or brands using two key variables to identify gaps in the market

What is the main purpose of market mapping?

To identify gaps in the market or to help reposition existing products

What is a key limitation of market mapping?

It only uses two variables, so it oversimplifies complex decisions; gaps may not represent real consumer demand

What is market segmentation?

Dividing a whole market into distinct customer groups that share similar characteristics, preferences or needs

What are the four main types of market segmentation?

Demographic, Geographic, Psychographic, Behavioural

What is demographic segmentation?

Segmenting by age, gender, income, social class or occupation

What is psychographic segmentation?

Segmenting by attitudes, opinions, beliefs and lifestyles

What is behavioural segmentation?

Segmenting according to usage rate, purchase frequency, brand loyalty or consumption timing

What does STP stand for?

Segment, Target, Position

What is competitive advantage?

Any feature or capability that enables a business to outperform rivals, attract customers and earn higher returns

Name four ways a business can achieve competitive advantage

Any four from: superior product features/quality, cost leadership, strong branding, excellent customer service, operational flexibility, ethical stance

What is product differentiation?

Distinguishing a product or service from competitors through unique features, performance or marketing to create a USP