Identifying, Anticipating & Understanding Customer Needs (AQA A Level Business): Flashcards
Exam code: 7132
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Define market research.
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Define market research.
Market research is the process of collecting and analysing information about customers, competitors and the wider market to support better decision-making.
How does market research help a business anticipate changes in demand?
Tracking market trends helps businesses adapt before sales begin to fall.
True or False?
Any market research, even if it is outdated, is better than no research at all.
False.
Inaccurate or outdated research can be as damaging as no research at all, so its value depends on the quality and reliability of the data.
Define primary research.
Primary research is gathering new information directly from consumers in the target market using field research methods such as surveys and interviews.
In ____________, free samples are provided to the target market for a limited period to gauge their response to the product.
In test marketing, free samples are provided to the target market for a limited period to gauge their response to the product.
Why does observation usually need to be combined with other research methods?
Observation captures consumer behaviour, but other methods are needed to understand the causes of that behaviour.
What is a focus group?
A focus group is a free-form discussion led by a marketing specialist to collect detailed feedback from a small group of the target market.
What are the disadvantages of interviews as a research method?
Interviews are time-consuming, as they are carried out one-on-one, and interviewer bias can affect the validity of results.
Why can a small sample size be a problem in primary research?
A small sample may be unrepresentative of all customers, leading to unreliable results.
Define confidence level.
The confidence level is the amount of certainty a business can have that its market research results are accurate.
Define confidence interval.
The confidence interval is the range of values possible for a given confidence level.
True or False?
Increasing the sample size narrows the confidence interval.
True.
Bigger samples shrink the interval, giving clearer answers on which to base marketing decisions.
What is the difference between quantitative and qualitative data?
Quantitative data is based on numbers, while qualitative data gathers descriptions or explanations, such as opinions and feelings.
Quantitative data may show that sales volumes are falling, but it does not reveal the ____ for the decline.
Quantitative data may show that sales volumes are falling, but it does not reveal the reason for the decline.
Define secondary research.
Secondary research is the collection, compilation and analysis of data that already exists.
What can a business learn from the annual reports of public limited companies?
Annual reports provide information about a company's performance, market position and future plans.
Trade and ______ associations provide detailed information about specific sectors, including market size, growth rates and benchmarks.
Trade and industry associations provide detailed information about specific sectors, including market size, growth rates and benchmarks.
What do marketing research companies provide?
Marketing research companies produce and sell in-depth reports on industries, markets and consumer trends.
True or False?
Secondary research is always cheap to obtain.
False.
Much secondary data is free or cheap, but market-specific data from specialist companies, such as Mintel reports, can be expensive.
Why might secondary data lack relevance?
Secondary data was collected for other purposes, so it may not fit the business's needs or may not be factually correct.
Secondary information may be out of date, especially in _____ markets.
Secondary information may be out of date, especially in dynamic markets.
How does the level of risk influence market research?
The higher the risk attached to a business decision, the more thorough the market research is likely to be.
True or False?
A business that needs to make a quick decision is likely to rely on secondary research.
True.
Time pressure often leads businesses towards secondary research, which can be accessed far more quickly than primary research.
What factors affect the reliability of market research?
Reliability is affected by sample size, the design of questions and the honesty of respondents.
How should a business decide how much to spend on market research?
A business must weigh the cost of research against the value of the information it provides, keeping it proportionate to its size and financial resources.
Define market mapping.
Market mapping is a tool for identifying the position of a product within a market.
What does a market map show?
A market map is a two-dimensional diagram showing the attributes or characteristics of a product compared with rivals' products.
What does it mean if there are no spaces left on a market map?
It indicates that the market is saturated, so competition is likely to be high and profits low.
True or False?
A gap on a market map may exist because it is not profitable to fill.
True.
Some gaps are empty because they are not profitable to fill, so a gap must be researched carefully before the business commits.
How can market mapping help a business position a new product?
The business can decide where to place a new product to differentiate it from rivals or to fill an identified gap.
How can market mapping inform the marketing mix?
Decisions about price, branding and promotion can be guided by where the business wants to sit on the map.
How does a market map help a business assess competition?
It highlights which competitors are closest and therefore most threatening.
How can a market map help a business review an existing product?
It shows whether the product is positioned where the business intends, or whether customer perceptions have changed.
True or False?
Market maps are complex and time-consuming to construct.
False.
Market maps are simple to construct and offer a visual illustration of a product's position in the market.
Why is a market map of limited use in a dynamic market?
A market map only provides insight at a specific point in time, so it can quickly become outdated.
Why can mapping a market be expensive?
Mapping a market may require primary research, which can be expensive.
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