Study Notes
Market research involves gathering, analyzing, and interpreting information about a market to help businesses make informed decisions. It is crucial for understanding consumer preferences and staying competitive.
- Market Research — the process of gathering, analyzing, and interpreting information about a market.
Example: A company conducts surveys to understand customer preferences. - Product-oriented Business — focuses on the product itself, often prioritizing price and quality.
Example: A company that produces basic necessities like soap. - Market-oriented Business — uses market research to understand consumer wants before developing products.
Example: A tech company that surveys users before launching a new app. - Primary Research — the collection of original data directly from sources.
Example: Conducting interviews with potential customers. - Secondary Research — uses existing data collected by others.
Example: Analyzing industry reports for market trends. - Random Sampling — selecting participants randomly, giving everyone an equal chance.
Example: Drawing names from a hat to choose survey participants. - Quota Sampling — selecting participants based on specific characteristics.
Example: Surveying a set number of people from each age group.
Exam Tips
Key Definitions to Remember
- Market Research: The process of gathering, analyzing, and interpreting information about a market.
- Primary Research: Collection of original data directly from sources.
- Secondary Research: Uses existing data collected by others.
Common Confusions
- Mixing up primary and secondary research methods.
- Confusing product-oriented with market-oriented businesses.
Typical Exam Questions
- What is the difference between primary and secondary research? Primary research involves collecting new data; secondary research uses existing data.
- How does market research benefit a business? It helps understand consumer needs and informs decision-making.
- What are the advantages of using random sampling? It reduces bias and ensures a representative sample.
What Examiners Usually Test
- Understanding of different market research methods.
- Ability to distinguish between product-oriented and market-oriented businesses.
- Knowledge of sampling techniques and their importance.