Which term describes the process of collecting and analysing information about a particular market, a good or a service?
Market research
Entrepreneurs carry out research before launching a product in order to reduce risk. What does this mean?
Finding out whether buyers will want the product before it is made
Market research findings help an entrepreneur choose what price to charge and where to sell the product. Which purpose of market research does this describe?
To aid decision making
What is meant by using market research to inform product development?
Using the findings to improve the design and features of a good or service
Market research can be used to gain customers' views and understand their needs and wants. What does this mean?
Asking buyers what they think and what they want from a product
What is meant by using market research to understand the market?
Finding out about the competitors, the trends and any gaps in the market
What is meant by understanding how a good or service complements others on the market?
Finding out how a product fits with other items that customers buy
Why do entrepreneurs carry out market research before starting a business?
To reduce the risk of the business failing
A café asks customers what they think of a new cake. Which purpose does this mainly meet?
To gain customers' views and understand their needs and wants
A shop owner researches rival shops to find out what products they sell. Which purpose does this mainly meet?
To understand the market
A software company asks users which features they want in a new app. What is this research most likely to inform?
The design of the product
When should market research usually be carried out for a new product?
Before developing the product
A tea shop checks whether selling cakes would appeal to its current customers. What is this research mainly checking?
How cakes and tea complement each other
Which of these is NOT a purpose of market research?
To guarantee a business will make a profit
A new business finds that most of its target customers use one social media site. How is this finding most useful?
It helps the business decide where to advertise
A café finds that its customers are ordering more plant-based food. Why is this finding useful when planning the menu?
It shows which food is becoming more popular
A shopkeeper finds that no other shop in her area sells vegan cakes. What has her research identified?
A gap in the market
A sandwich shop asks local workers how often they buy their lunch out. Why is this finding useful?
It helps the shop plan how much stock to order
Which term describes information that is collected first-hand by an enterprise for its own specific purpose?
Primary market research
What is the name for a small number of selected people who are brought together to discuss a particular topic and give their ideas and opinions?
Focus group
What is meant by a consumer trial?
A product or service is offered to selected members of the public before general release so their reaction can be gauged
Which term describes offering a new product or campaign to a limited group, area or number of stores to gauge consumer opinion before a wider launch?
Test marketing
What is meant by observation as a primary market research method?
Watching and recording how customers, employees or competitors behave in a real situation
What is the name for the process of collecting information from a sample of people using a set of questions?
Survey
Which is a disadvantage of collecting market research data using a focus group?
It can be difficult and expensive to organise
Which term describes collecting information by talking to people first-hand, either face to face or online?
Interview
Which is a disadvantage of using questionnaires to collect market research data?
Responses may be inaccurate or unrepresentative
An entrepreneur watches customers in a competitor's shop to see which products they pick up. What is a disadvantage of this method?
It cannot show the reasons why customers behave as they do
A business wants a small number of customers to discuss a new recipe in detail and share views with each other. Which method should it use?
A focus group
Which is a disadvantage of using test marketing to launch a new product?
Competitors become aware of the product earlier than normal
What is an advantage of using face-to-face interviews rather than questionnaires?
The questions can be changed to suit the responses given
What is an advantage of primary market research over secondary market research?
The data is specific to the enterprise and its product
A student plans to collect primary data by using the internet. What is the problem with this plan?
It is a tool used to carry out research, not a method itself
A shop owner wants to know how many people pass her shop at different times of day. Which method should she use?
Observing the location at different times
Which is a disadvantage of primary market research compared with secondary market research?
It can be time-consuming and costly to collect
A bakery asks 40 shoppers to taste a new cake and give their views before it is sold in its shops. Which primary research method is this?
A consumer trial
A supermarket manager wants to find out how shoppers move around the aisles. Why is observation a suitable method for this?
It records what shoppers actually do in a real situation
Why might a business use a focus group rather than a questionnaire to find out customer opinions?
Members can discuss ideas and respond to each other
A bakery sells a new loaf in two of its ten shops for a month before deciding whether to sell it everywhere. What is an advantage of this approach?
Popularity can be measured before a national launch
A business hands out paper questionnaires in its shop and also emails an online survey to customers. What does this show about primary market research?
It can be carried out physically or digitally
A bike repair shop emails a questionnaire to every customer after their repair. Which is an advantage of collecting feedback this way?
There are no printing or paper costs
A student interviews five shoppers outside a shopping centre about a new app. Which is a disadvantage of this method?
It is limited to a relatively small number of people
Which term describes information that an enterprise has already collected itself, such as its own sales and customer records?
Internal data
What is meant by 'secondary market research'?
Data that already exists, collected by others for a different purpose
What is the name for a publication that reports news and developments within one particular industry?
Trade magazine
What is meant by 'competitors' data'?
Information about rival businesses that is publicly available, such as their accounts and marketing
What is meant by 'the census'?
A count of all people and households in the UK carried out every ten years
Which source of secondary data is produced by specialist companies such as Mintel, Keynote and Which?
Market research reports
What is meant by 'government statistics' as a source of market research?
Official data collected by government agencies and made available to everyone
A bakery checks its own records of last year's birthday cake sales. What type of market research source is this?
Internal data
Why is secondary market research often quicker to carry out than primary market research?
The data has already been collected by someone else
A business uses a market report covering the whole of the UK to plan a shop in one small town. Why might this information be of limited use?
The data may not be specific to the business's local area
A business that has sold furniture for years now wants to start selling garden tools. Why is its internal data of limited help?
It only records sales of the products the business already sells
Which is an advantage of using government statistics as a source of market research?
It is a reliable source of data with no bias
A small business wants detailed, up-to-date data on the pet food market, but the source it needs is expensive. Which source is this?
A published market report from a company such as Mintel
Why might competitors' data be of limited use to a small independent shop?
Information about large companies cannot easily be compared with a small business
A florist wants to keep up with new developments and trends in the floristry industry. Which source is most suitable?
A trade magazine for the floristry industry
A student plans to use the internet as a secondary market research source. Why is this too vague to be acceptable?
The internet is how sources are accessed, not a source itself
An enterprise is considering using secondary market research instead of collecting its own data. Why might the secondary data not be suitable?
It was gathered for someone else's purpose, so it may not match
A shop owner reads in a newspaper that sales of a product are rising fast. Why should this information be treated with caution?
The information may be incorrect or biased
An enterprise uses a national market report that contains the views of thousands of consumers. Which advantage of secondary research does this show?
It draws on a much larger sample of consumers
A business uses census data collected in 2021 to plan a shop opening in 2026. Why might the figures be of limited use?
The number and incomes of local people may have changed
A café owner wants to know what customers think of a rival café nearby. Which source would show this?
Customer reviews on a review website
Which type of market segmentation groups customers by the kind of paid work that they do?
Occupation
What is meant by segmenting a market by income?
Grouping customers by the amount of money they have available to spend
What is meant by segmenting a market by lifestyle?
Grouping customers by their interests and free time activities
What is a likely problem for a business that does not segment its market?
Its marketing budget is wasted on customers who are unlikely to buy
Which of these lists contains only ways of segmenting a market?
Age, gender and location
What is meant by segmenting a market by gender?
Grouping customers by whether they are male or female
Segmenting customers by the region of the country they live in is known as segmentation by
Location
What is meant by market segmentation?
Dividing customers into groups that share common characteristics
Which is an example of segmenting a market by age?
A garden centre gives a discount to customers over 65
A fragrance brand advertises a new perfume only in magazines aimed at women. What is the main benefit of targeting one gender?
Money is not spent reaching people unlikely to buy
A business sells waterproof clothing to people who work outdoors. Why might it choose this group?
These workers have a greater need for the product
Which statement explains why businesses segment customers by income?
It shows which customers can afford luxury products
A takeaway in Leeds pays for leaflets to be delivered to homes in London. Why is this unlikely to succeed?
The leaflets reach people who live too far away to buy the food
An online shop uses social media to find people who enjoy walking and camping. Why is lifestyle segmentation suitable for this shop?
It lets adverts be aimed at people whose interests match the products
What is a target market?
A group of customers that a product is aimed at
A business writes one advert for all of its customers. What problem is it most likely to face?
The message is too general to appeal strongly to any group
Which of these is a benefit of taking a targeted approach to marketing?
It helps the business understand what its customers want
A small business aims all of its products and adverts at one clear group of customers. What is a likely benefit of this targeted approach?
It helps the business build a brand that customers trust
A clothing company sells the same plain range to every customer and never groups its market. Which problem is it most likely to face?
Rivals that target groups of customers may take its sales
Why do many businesses segment their market by age?
People of different ages tend to need different products
A garden centre wants to sell large trees that need a lot of space to grow. Why might it target customers who live in villages?
These customers are more likely to have room for the trees
A business aims its products at customers who enjoy gardening. How is this targeting most likely to increase its profits?
It sells more to customers whose needs are met
Which term describes dividing customers into groups that share common characteristics so that a business can aim its product at them?
Market segmentation
What is meant by 'target market'?
A group of customers with shared characteristics that a product is aimed at
Which term describes the practice of aiming a business's promotional activities only at the group of customers most likely to buy its product?
Targeted marketing
What is meant by 'customer retention'?
Keeping existing customers buying from a business over time
Which term describes the proportion of total sales in a particular industry that is held by one business?
Market share
What is meant by 'competitive edge'?
An advantage that makes a business more appealing to customers than its rivals
What is meant by 'brand loyalty'?
Customers repeatedly choosing to buy from the same business over time
Which of these is a benefit of market segmentation for a small business?
It helps products to match the needs of a chosen customer group
How does segmenting the market help a business to understand its customers better?
It groups customers who share similar characteristics and needs
A business selling hiking equipment advertises in a walking magazine because walkers are its target group. What is the benefit of this?
The promotion is seen by customers who are likely to buy
Why can effective market segmentation increase customer retention?
Customers are satisfied with the product and buy from the business again
How does market segmentation help a business to increase its profits?
It sells more because its products suit the target customers
What does an increase in market share mean for a business?
It sells a larger proportion of all the sales in its market
Why does targeting one customer group help a business to develop its brand?
The group gets to know the business and trusts its products
How can knowing its target market help a business to develop ideas for growth?
It can spot new products that the target customers would buy
A business splits its customers into groups and finds that one group is most likely to buy its new product. How does this help the business to make decisions?
It knows which customers to aim its product and adverts at
How can segmenting its market help a small business to increase its market share?
It wins more of the sales in its market from rival businesses
Why is it easier for a business to write its marketing messages once it has segmented its market?
It knows the needs and interests of its target group