MARKET RESEARCH

What is market research?

The process of collecting, recording, and analysing data about customers, competitors, and the market to reduce business risk and support decision-making.

What is the main purpose of market research?

To help businesses understand customer needs, predict demand, and make informed decisions.

Why is market research valuable to a business?

It reduces risk, improves decision-making, identifies opportunities, and helps meet customer needs.

How does market research reduce risk?

By providing information about demand, prices, and customer preferences before launching products.

How does market research improve competitiveness?

By allowing businesses to differentiate products and respond to customer needs better than rivals.

What is primary market research?

Research collected first-hand by a business for a specific purpose.

Give examples of primary research methods.

Questionnaires, interviews, focus groups, observation, test marketing.

What is secondary market research?

Research that already exists and has been collected by someone else.

Give examples of secondary research sources.

Government statistics, market reports, company records, internet research.

One advantage of primary research?

It is specific and relevant to the business’s needs.

One advantage of secondary research?

It is cheaper and quicker to obtain.

One disadvantage of market research?

It can be expensive, time-consuming, and may become outdated.

How do stakeholders benefit from market research?

Customers get better products, employees gain job security, and owners reduce financial risk.

How could market research negatively affect stakeholders?

Poor research can lead to job losses or wasted investment.

What is qualitative data?

Non-numerical data that explains opinions, motivations, and attitudes.

Give examples of qualitative data.

Customer opinions, focus group feedback, interview responses.

What is quantitative data?

Numerical data that can be measured and analysed statistically.

Give examples of quantitative data.

Sales figures, survey results, market share percentages.

One advantage of qualitative data?

Provides in-depth insights into customer behaviour.

One advantage of quantitative data?

Easier to analyse and identify trends.

What is a questionnaire?

A set of written questions designed to collect data from a large number of respondents.

One advantage of questionnaires?

They can gather large amounts of data quickly.

One disadvantage of questionnaires?

Responses may be inaccurate or biased.

What is an interview?

A face-to-face or online discussion to gain detailed customer insights.

What is a focus group?

A small group discussion used to explore attitudes and opinions.

What is observation?

Watching how customers behave without direct questioning.

What is test marketing?

Launching a product in a small area before a full launch.

What are internal secondary sources?

Data already held by the business, such as sales records and customer databases.

What are external secondary sources?

Data from outside the business, such as market reports and government statistics.

One advantage of secondary research?

Saves time and money.

One disadvantage of secondary research?

Data may be outdated or not specific.

What factors influence the choice of market research method?

Cost, time, accuracy, target market, and type of data needed.

Why might a business choose qualitative research?

To understand customer attitudes and motivations.

Why might a business choose quantitative research?

To measure market size or predict demand.

Why is primary research more reliable?

It is collected for a specific purpose and is more relevant.

Why might secondary research be less reliable?

It may be biased or collected for a different purpose.

Why do businesses often use both types?

To balance cost, speed, and accuracy.

What does it mean to interpret market research?

Analysing data to identify patterns, trends, and insights.

Why must data be evaluated?

To assess reliability, validity, and usefulness.

What is sampling?

Selecting a smaller group of people to represent the target market.

Why do businesses use sampling?

It is cheaper and quicker than surveying everyone.

What is random sampling?

Every member of the target market has an equal chance of being selected.

One advantage of random sampling?

Reduces bias.

One disadvantage of random sampling?

Can be difficult and time-consuming.

What is quota sampling?

Selecting a sample based on characteristics such as age or gender.

One advantage of quota sampling?

Ensures representation of key groups.

One disadvantage of quota sampling?

Interviewer bias may occur.

What is bias in market research?

When results are influenced in a way that makes them inaccurate.

How can bias be avoided?

Using neutral questions, large samples, and appropriate sampling methods.

One advantage of sampling for businesses?

Reduces cost while providing useful insights.

One disadvantage of sampling?

Results may not fully represent the whole market.

How does sampling affect stakeholders?

Accurate sampling improves decisions and job security; poor sampling increases risk.