The Purpose & Methods of Market Research (AQA GCSE Business): Flashcards
Exam code: 8132
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Define market research.
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Cards in this collection (40)
Define market research.
Market research is the process of systematically gathering data from consumers, which can be used to inform business decisions.
Why is ongoing market research especially important in dynamic markets?
Dynamic markets have significant competition and frequent changes in customer preferences, so businesses need to keep their information up to date.
How can market research give a business first mover advantage?
Market research can identify customer needs before competitors do, so the business can be the first to meet them.
As customer needs can change rapidly, market research helps a business avoid stocking goods that are no longer in ____.
As customer needs can change rapidly, market research helps a business avoid stocking goods that are no longer in demand.
Define gap in the market.
A gap in the market is an area of the market where customers' needs are not yet being fully met.
True or False?
Products that precisely meet unmet customer needs may allow a business to charge a premium price.
True.
Customers may be willing to pay a premium price for products developed to meet needs that rivals are not yet meeting.
How does market research reduce risk when a business launches a new product?
It clarifies the features, price, promotion and distribution customers want. This limits marketing mistakes and improves the chances of a successful launch.
Why do businesses use market research to investigate competitors?
Understanding rivals' products, promotion and pricing helps a business make its own products stand out.
Define quantitative data.
Quantitative data is market research data that is based on numbers, such as sales figures, market share or customer ratings on a scale of 1 to 10.
Define qualitative data.
Qualitative data is market research data made up of descriptions or explanations based on conversations, discussions, impressions and feelings.
True or False?
Qualitative data is usually gathered through secondary research.
False.
Qualitative data is usually gathered through primary research, such as discussions with customers.
Numerical data does not provide the _____ for outcomes, such as why sales volumes are falling.
Numerical data does not provide the reasons for outcomes, such as why sales volumes are falling.
Why can numerical data be difficult for smaller businesses to use?
Data analysis and interpretation is a complex skill that smaller businesses are likely to lack.
True or False?
Respondents in focus groups may be influenced by the responses of others.
True.
This is a limitation of qualitative data, as respondents may not give an accurate picture of their own views.
Define primary research.
Primary research is the process of gathering new information directly from consumers in the target market, using field research methods such as surveys and interviews.
Define sample.
A sample is a group of respondents that reflects the characteristics of the target market as a whole.
What is the most widely used method of primary research?
Surveys are the most widely used method, where a questionnaire is used to ask a series of questions to a number of respondents.
What does observation involve in market research?
Observation involves studying consumer behaviour, for example the impact of packaging or product placement in a store on consumer choice.
Free-range discussions led by a marketing specialist to collect detailed feedback from a small, rewarded group are called __________.
Free-range discussions led by a marketing specialist to collect detailed feedback from a small, rewarded group are called focus groups.
How do interviews differ from surveys?
In an interview, an interviewer asks the questions. This takes longer but allows follow-up questions that a survey can easily miss.
Why is primary research often more relevant to business decisions?
It is up to date, asks specific questions and is focused on the needs of the business, and it is not available to rivals.
True or False?
Primary research results are always reliable.
False.
The sample may be too small and unrepresentative, and bias may lead respondents to answer questions in a particular way.
Define secondary research.
Secondary research is the collection, compilation and analysis of data that already exists.
What are the main sources of secondary research?
Sources include government publications, academic institutions, industry associations, specialist market research reports, financial reports, online databases and media sources.
True or False?
Secondary data is always relevant because it was collected about the business's own market.
False.
Secondary data was collected for other purposes, so it may lack relevance, be difficult to analyse or not be factually correct.
Why is secondary research suitable for small businesses?
It is quicker and often cheaper to collect than primary research, which suits a business that lacks a large marketing budget or expertise.
Which methods suit a business that wants in-depth insights into consumer motives?
Qualitative methods, such as in-depth interviews, are likely to be the most suitable.
True or False?
Surveys can cover a larger sample size than interviews but may lack depth.
True.
Quantitative methods such as surveys reach more people, while qualitative methods give more detailed insights but are more time-consuming and expensive.
True or False?
Market research data is often fed into a spreadsheet or database before it is presented.
True.
Storing data in a spreadsheet or database allows a business to generate a meaningful presentation of it.
Why is market research data often presented in graphs or charts?
Graphs and charts make the data easier for the intended audience to understand.
Tables summarise data in an _______ form.
Tables summarise data in an organised form.
What type of data are bar charts used to show?
Bar charts show data that is independent of each other, such as sales per store or sales by category.
True or False?
A pie chart is the best way to show how sales change over time.
False.
A pie chart shows how a whole is divided into different elements, such as the market share held by different competitors.
A business has total sales of $180,000 and one product makes up 23.9% of these sales. How much are that product's sales worth?
The product's sales are $180,000 × 0.239 = $43,020.
Define infographic.
An infographic is an easy-to-understand visual representation of data.
Market size can be measured through sales volume or sales ___.
Market size can be measured through sales volume or sales value.
Define sales volume.
Sales volume is the number of products sold.
How is sales revenue calculated?
Sales revenue is calculated using this formula:
Sales revenue = price × quantity sold
Define market share.
Market share is the proportion of the total sales in a market that a business's product(s) make up.
Market share = Sales of a business ÷ Total sales in the market × 100
A business has sales of £328m in a market worth £4.6bn. What is its market share to two decimal places?
Its market share is £328m ÷ £4,600m × 100 = 7.13%.
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