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Qualifications Cambridge National Enterprise & Marketing

Topic Area 2: Market research to target a specific customer

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Why carry out market research before product development?
Assess likely success before launching
How does market research reduce risks?
Identify potential customer problems early
How does market research aid business decisions?
Provide evidence for choosing actions
What does market research reveal about the market overall?
Show market size trends and competitors
Why gather customers' views via research?
Understand customers' needs and wants
How does market research inform product development?
Show needed changes and useful features
What can market research reveal about product fit?
Show how product complements existing goods
How does research help identify customers?
Identify likely customer segments
What does research show about market gaps?
Reveal unmet customer needs and gaps
How does market research help pricing decisions?
Show price customers are willing to pay
What packaging information can research provide?
Suggest likely packaging options and dislikes
When should entrepreneurs carry out market research?
Conduct research before developing a product
How can research help choose between product features?
Provide customer preference data to compare options
Which is an advantage of primary market research?
Data specific to business needs
Why do enterprises carry out market research?
Reduce risk and aid decisions
What is a limitation of using observations for market research?
Cannot explain why behaviour occurs
When do observations give true behavioural responses?
People are unaware they are observed
What most affects the usefulness of a questionnaire?
Wording of the questions used
Which is NOT a typical questionnaire delivery method?
Satellite broadcast to random households
What is an advantage of interviews over surveys?
Allows probing and follow-up questions
What is a common limitation of focus groups?
Some members may not contribute
What is a benefit of consumer trials?
Create early adopters and advocates
How can test marketing or pilots help a business?
Help predict stock and supply needs
What is a disadvantage of secondary research?
May be out of date or irrelevant
Which research method can measure customer footfall?
Observations measuring customer footfall
How would you describe secondary research?
Data that already exists elsewhere
Why might a business use other people's primary research?
Quicker and cheaper than new studies
Which is a common drawback of secondary research?
May be biased or out of date
What is internal data?
Information a business already holds
What is an advantage of using internal data?
Readily available and highly relevant
What is a limitation of internal data?
May be out of date or erroneous
What do books and trade magazines mainly provide?
Background information and industry trends
What do competitors' publicly available data often lack?
Most useful strategic information
How are government reports and statistics usually described?
Reliable, detailed and often free
What does a national census provide?
Detailed snapshot of people and households
How are market research company reports typically?
Precise and comprehensive but costly
What best distinguishes quantitative from qualitative secondary data?
Numbers and statistics versus opinions
What does market segmentation mean?
Dividing customers into smaller groups
Which pair is commonly used to segment customers?
Age and gender differences
What is a target market?
Specific group the product targets
What does demographic segmentation sort people by?
Characteristics like age and income
What does age segmentation recognise?
Different needs at different life stages
Which best describes gender segmentation?
Marketing aimed mainly at one gender
Why is occupation useful for segmentation?
Shared interests among workers in same jobs
What does income segmentation separate customers by?
How much people earn for purchases
What do socio-economic groups combine?
Occupation, income and education levels
Which is an example of geographic segmentation?
Urban versus rural customer groups
Which best shows lifestyle segmentation?
Customers who enjoy outdoor sports
What is a likely problem when a market is not segmented?
Harder to build brand loyalty
What marketing issue arises from no segmentation?
Marketing messages reach unlikely buyers
Why does market segmentation reduce advertising waste?
Targets ads to likely customers
How does segmentation help product development?
Creates products for specific needs
How can segmentation affect customer retention?
Improves satisfaction and repeat buying
How does segmentation influence market share?
Grows share within targeted groups
What brand benefit does segmentation provide?
Allows tailored messages and images
Why is targeted marketing often more profitable?
Reduces waste and raises margins
How does knowing segment habits help business growth?
Inspires new ideas and improvements
What tends to happen without market segmentation?
Marketing messages become generic and wasteful
How does segmentation affect advertising spend?
Concentrates spending on likely buyers
How does a targeted approach help profitability?
Focuses resources on high-value customers
How does segmentation help match customer needs?
Aligns features to customers' preferences
How does segmentation affect customer loyalty?
Builds stronger loyalty through relevance
How can segmentation increase market share?
Dominates niches within chosen markets