Market Research (Edexcel IGCSE Business): Flashcards
Exam code: 4BS1
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Define market research.
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Define market research.
Market research is the process of systematically gathering data from consumers, used to influence business decisions.
Name the four main purposes of market research.
To identify customer needs and wants, recognise gaps in the market, reduce risk, and investigate competitors.
How does market research help a business identify customer needs?
It can spot needs before competitors do, giving first mover advantage and avoiding stocking goods no longer in demand.
What is a 'gap in the market'?
An area of the market where customers' needs are not yet being fully met.
How does market research reduce risk when launching a new product?
It clarifies the features, price, promotion and distribution customers want, limiting marketing mistakes and improving the chance of a successful launch.
Why do businesses research their competitors?
To understand rivals' products, pricing and promotion so they can make their own products stand out.
True or False?
Market research is only useful before a business first launches.
False.
Ongoing research is important, especially in dynamic markets where customer preferences change frequently.
If a business finds an unmet need, customers may be willing to pay a price for a product that meets it.
If a business finds an unmet need, customers may be willing to pay a premium price for a product that meets it.
What is 'first mover advantage'?
The benefit a business gains by identifying and meeting a customer need before its competitors do.
True or False?
Market research helps a business develop the correct marketing mix.
True.
By revealing what customers want, it helps the firm develop the correct marketing mix.
Define primary research.
Primary research gathers new information directly from consumers in the target market, using methods like surveys and interviews.
Define secondary research.
Secondary research collects and analyses data that already exists.
Name three methods of primary research.
Surveys, interviews, observation, test marketing, and focus groups (any three).
Define a sample.
A sample is a group of respondents that reflects the characteristics of the target market as a whole.
Why is a larger sample size usually better?
The larger the sample, the more likely the results reflect the views of the whole target market.
What is a focus group?
A free-ranging discussion led by a marketing specialist to collect detailed feedback on the marketing mix from the target market.
What is test marketing?
Providing free samples for a limited period to the target market to gauge their response to the product.
Give two sources of secondary research.
Government publications, market research reports (e.g. Mintel), online databases (e.g. Statista), financial reports, or media sources (any two).
Give one advantage of primary research.
It is focused on the business's needs, up-to-date, and not available to rivals.
Give one disadvantage of primary research.
It can be expensive and time-consuming, and a small sample may give unreliable results.
True or False?
Secondary research is usually quicker and cheaper to collect than primary research.
True.
The information already exists, so it is often quicker and cheaper, which suits small businesses.
True or False?
Primary research gathers information that already exists.
False.
Primary research gathers new information directly from consumers; secondary research uses data that already exists.
Give one disadvantage of secondary research.
It was collected for another purpose, so it may lack relevance, be out-of-date, or not be accurate (e.g. Wikipedia).
Define quantitative data.
Quantitative data is based on numbers, such as sales figures, market share or ratings on a scale.
Define qualitative data.
Qualitative data gathers descriptions, opinions and feelings based on conversations and impressions, usually from primary research.
Give one limitation of quantitative data.
It may be out-of-date, and it shows what is happening but not why (e.g. that sales are falling, but not the reason).
Give one limitation of qualitative data.
It can be affected by bias, and is difficult to present in graphs and charts.
Both types of data are useful, so analysis should ideally include a of quantitative and qualitative data.
Both types of data are useful, so analysis should ideally include a combination of quantitative and qualitative data.
Name two social media platforms businesses use for market research.
Facebook, Twitter, Instagram, or TikTok (any two).
Give two benefits of using social media for market research.
Speed (near-instant responses), low cost, stronger customer relationships, and quick feedback.
Why is reliable market research data important?
It supports decision-making, reduces risk, and helps a business set realistic objectives.
Name two factors that affect the reliability of market research.
How questions are phrased, how the sample is selected, who conducts it, potential bias, and when/where it is carried out (any two).
Why should researchers avoid leading questions?
Because they push respondents towards a particular answer, reducing the reliability of the data.
True or False?
Market research data can have only a short period of usefulness.
True.
Tastes, fashions, economic conditions and technology change, giving data a short period of usefulness.
Presenting results in a particularly positive or negative way introduces into the research.
Presenting results in a particularly positive or negative way introduces bias into the research.
True or False?
Qualitative data is always more reliable than quantitative data.
False.
Neither is automatically more reliable — both are useful, and analysis should ideally combine the two.
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