Market Research Flashcards

All 24 cards in this deck

What is market research?

The process of collecting information about the market or what customers want that might help a business be more successful and spot gaps in the market.

What are the four purposes of market research?

To identify and understand customer needs, to identify gaps in the market, to reduce risk, and to inform business decisions.

What is a gap in the market?

A place in the market where there is demand for a product or service that is not currently being met.

How does market research reduce the risk faced by an entrepreneur?

It gives evidence that customers want the product before money is spent, so the business is less likely to fail.

What is primary market research?

Research where a business collects new, first-hand data itself for its own purpose.

Name the four primary research methods in the specification.

Survey, questionnaire, focus group and observation.

What is a focus group?

A group of people brought together to discuss their views on a product or service.

Give one disadvantage to a small business of using a focus group.

Any one of: it is expensive as participants may have to be paid; the moderator can influence responses, leading to bias; it takes time to arrange.

What is observation as a method of market research?

Watching and recording how customers behave, e.g. how they move around a shop or which products they pick up.

What is secondary market research?

Using data that already exists, collected by someone else for another purpose.

Name the three sources of secondary research in the specification.

The internet, market reports and government reports.

True or false? A survey is an example of secondary market research.

False. A survey is primary research; the internet and market reports are secondary.

Give one benefit to a small business of using secondary market research.

Any one of: the research has already been carried out so it saves time; it is convenient when customers are hard to reach; government sources provide validated information.

Give one drawback of using the internet for secondary market research.

Any one of: it may not give focused information about the business's own idea; websites may be out of date and unreliable.

What is the difference between qualitative and quantitative data?

Qualitative data is non-numeric, based on opinions and views; quantitative data is numerical and can be measured and counted.

Give one disadvantage to a small business of using qualitative data.

Any one of: responses are opinions and vary a lot, making it hard to judge customer preferences; it is mostly non-numeric so it is difficult to analyse and make decisions from.

Give one advantage of using social media to collect market research data.

Any one of: it is cheap or free; it reaches huge numbers of local, national and international customers; results can be turned into graphs automatically, saving time.

Why is the reliability of market research data important?

Unreliable data leads to poor business decisions — e.g. out-of-date websites give a false picture of the competition.

True or false? Market research guarantees that a new business idea will succeed.

False. It reduces risk and informs decisions, but data can be unreliable or out of date.

Give one advantage of primary market research over secondary research.

Any one of: it is up to date; it answers the business's own questions, so it is specific to its needs; it gives direct contact with customers.

Give one drawback of primary market research compared with secondary research.

Any one of: it takes longer to plan, collect and analyse; it usually costs more, which a small business may struggle to afford.

Give one cause of bias in market research data.

Any one of: leading questions that push people towards an answer; a sample that does not represent the target market; respondents saying what they think the business wants to hear.

How does sample size affect the accuracy of market research?

The larger the sample, the more accurate the results are likely to be, although a bigger sample costs more to collect.

Why is it useful to combine quantitative and qualitative market research data?

The numbers show what is happening, for example a fall in sales, while the opinions explain why it is happening.