CIE As Level Business | 3.2 Market Research - Marketing

Market research

The process of *collecting, recording* and *analysing* data about customers, competitors and the market.

Primary research

The collection of first-hand data that is directly related to the needs of the business.

Secondary research

The use of existing data that was originally collected for another purpose.

What are the *benefits* of identify consumer characteristics and profiles? (name 3)

1. *Improves targeting and promotion*

—> By understanding who the customer is, businesses can design marketing messages that are more likely to appeal to them.

2. *Helps design better products and services*

—> Knowing what customers value enables businesses to develop products that match their needs more closely.

3. *Supports market segmentation*

—> Customer profiles help divide the market into meaningful groups, making it easier to meet the needs of each segment effectively.

4. *Increases customer satisfaction and loyalty*

—> When customers feel understood and valued, they are more likely to return and recommend the brand to others.

5. *Reduces marketing waste*

—> Targeting the right people avoids spending money on those who are unlikely to buy the product.

What are the *advantages* of using *primary research*?

1. *Specific to business needs*

—> Data is collected for a particular purpose.

—> ✅: *Relevant + accurate* results for decision-making.

2. *Up-to-date information*

—> Data is collected in real time.

—> ✅: Reflects *current market conditions + trends*

3. *Greater control + flexibility*

—> The business chooses the method, sample, and questions — adapting them to specific needs.

—> ✅: Improves *reliability + usefulness* of results.

4. *Confidentiality*

—> Data is not publicly available.

—> ✅: Provides a *competitive advantage*.

What are the *disadvantages* of using *primary research*?

1. *Expensive*

—> Costs include designing surveys, hiring researchers, and data collection.

—> ❌: Increases *business expenses*.

2. *Time-consuming*

—> Collecting and analysing data takes time.

—> ❌: May delay *decision-making*.

3. *Risk of bias / inaccurate results*

—> Poorly designed questions or small sample sizes can distort findings.

—> ❌: Leads to *unreliable conclusions*.

4. *Requires expertise*

—> Effective research needs skilled staff.

—> ❌: Adds *training + hiring costs*.

What are the methods of gathering primary research data?

- Surveys

- Observation

- Interviews

- Test marketing

- Focus groups

What are the *advantages* and *disadvantages* of using *surveys*? (1 from each)

✅ A *large amount* of data can be collected relatively quickly.

✅ Digital surveys are *cheap* to distribute.

❌ *Limited depth* with closed questions.

❌ *Poor response rates* as many ignore surveys.

What are the *advantages* and *disadvantages* of using *observation*? (1 from each)

✅ Records what customer *actually do* rather than what they say.

✅ No *response bias* as no questions are asked.

✅ Useful for *in-store insights* as it shows movement, dwell time, product interaction.

❌ *Costly* equipment or trained observers are needed.

❌ *Limited depth* as only behaviour is seen, not motivations.

❌ *Observer bias* as behaviour can be misinterpreted.

What are the *advantages* and *disadvantages* of using *interviews*? (1 from each)

✅ *Open-ended* questions allow respondents to explain their views —> *deeper insights*.

✅ Interviewer can probe *unclear* answers —> improved *accuracy + understanding*.

✅ Personal interaction can make respondents *more open* —> more *honest + useful* responses.

❌ Each interview *takes time* to conduct and analyse.

❌ *Expensive* as trained interviewers (+ possibly travel) is required.

❌ *Interviewer bias* (tone, wording, or behaviour) may influence answers.

What are the *advantages* and *disadvantages* of using *test marketing*? (1 from each)

✅ Problems can be identified *early* —> *lower financial risk*.

✅ Based on *actual sales + behaviour* —> *reliable* decision-making.

❌ Requires production, distribution, and promotion in the test area —> *increases costs* before launch.

❌ *Time-consuming* as testing delays launch —> *competitors* may gain an advantage.

What are the *advantages* and *disadvantages* of using *focus groups*? (1 from each)

✅ Small group discussions allow participants to *explain opinions* —> *depth*.

✅ *Easy* and *inexpensive* to organise small groups.

❌ Participants may be *reluctant* to share their true opinions in a group situation.

❌ Some participants may *influence* others.

❌ *Rewards* for participating in focus groups make it *expensive* in comparison to other methods.

What are the *advantages* of using *secondary research? (1 from each)

1. *Low cost*

—> Data already exists (e.g. government reports, industry data).

—> ✅: Reduces *research costs*, especially for small businesses.

2. *Quick to obtain*

—> Information is readily available online or in published sources.

—> ✅: Speeds up *decision-making*.

3. *Large amounts of data available*

—> Covers wide markets and large samples.

—> ✅: Provides a *broad overview of the market*.

What are the *disadvantages* of using *secondary research* (1 from each)

1. *May be outdated*

—> Data could have been collected a long time ago.

—> ❌: May not reflect *current market conditions*.

2. *Lack relevance*

—> Data may be collected for a different purpose.

—> ❌: May not match the firms' *exact needs* —> *less useful insights*.

3. *Possible lack of reliability*

—> Sources may be biased or inaccurate as the business cannot ensure methodology used.

—> ❌: Leads to *misleading conclusions*.

Sampling

The process of selecting a group of respondents from a larger population.

Sampling bias

When a sample is not a good representation of the whole population, because it is chosen in ways which give some people greater chance of being selected.

What are the *limitations* of market research data?

- Respondents may not give *truthful* or *accurate* answers.

- Questions may be *poorly designed* or *unclear*.

- Secondary data may be *outdated* or *collected for a different purpose*.

- Data collection methods be *inconsistent* or *poorly managed*.

Qualitative data

*Non-numerical data*, which provides insight into the detailed motivations of consumers and helps to explain their buying behaviour or options.

What are the *limitations* of *qualitative data*? (name 3)

- *Bias* may mean that analysts can *interpret responses in a particular way*.

- Respondents may *lack awareness* or *language skills* to explain preferences accurately.

- Respondents in *focus groups* may be *influenced* by the responses of others or not provide accurate information.

- Qualitative data is difficult to present in *graphs and charts*, so it may not be easily understood.

Quantitative data

Numerical results from research that can be statistically analysed.

What are the *limitations* of *quantitative data*?

- Numerical data may be *out-of-date*, especially in dynamic markets.

- *Data analysis + interpretation* is a complex skill that is likely to be lacking in smaller businesses.

- Looking at a *small amount of data* and then *extrapolating* results can provide wrong assumptions on which to base decisions.

- Numerical data does not provide *reasons* for outcomes (e.g. data may reveal sales volumes but not *reasons for for the decline*)

Arithmetic mean

The value calculated by totalling all the results and dividing the number of results.

Mode

The value that occurs most frequently in a set of data.

Medium

The value of the middle item when data has been ordered / ranked.

Range

The difference between the highest and lowest value.