Market Research Fundamentals

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Questions and Answers

What is the primary purpose of market research for an entrepreneur?

To increase product cost

To analyze competitors' marketing strategies

To determine the level of demand for a product (correct)

To gather personal data about employees

Loyalty cards are only used to offer discounts to customers.

False

What are the two main types of data collection methods in market research?

Primary data and secondary data

What is a crucial decision that can significantly impact a business's profits?

Location selection Signup and view all the answers

The first step in the market research process is determining _____ needs.

information Signup and view all the answers

A good location for a business has no effect on customer traffic.

False Signup and view all the answers

Match the following terms with their correct definitions:

Primary data = Facts collected from original sources for specific research Secondary data = Facts already collected by another person or organization Market research = The process of collecting and analyzing information about customers Loyalty cards = Tools used by retailers to gather customer data Signup and view all the answers

Name one demographic factor that affects customer spending.

Age Signup and view all the answers

Which of the following is NOT typically a benefit of market research?

Increases product prices Signup and view all the answers

Market research can help create a responsive marketing plan.

True Signup and view all the answers

The ratio of working age individuals to pensioners is an indicator of __________ in a population.

demographics Signup and view all the answers

Which of the following locations is typically NOT considered suitable for retail businesses?

Residential neighborhood Signup and view all the answers

What is a common type of information gathered by retailers using loyalty cards?

Customer buying habits Signup and view all the answers

Demographic changes have no impact on market research.

False Signup and view all the answers

What is the primary goal of analysing and interpreting data in marketing?

To determine what the data means for solving marketing problems. Signup and view all the answers

Match the following business locations with their characteristics:

Shopping Centre = High foot traffic and visibility Home-based Business = Lower overhead costs Main Street = Traditional retail setting Online Presence = Global reach but limited physical interaction Signup and view all the answers

What is the primary goal of a cost–benefit analysis?

To compare the strengths and weaknesses of alternatives Signup and view all the answers

A cost–benefit analysis should be used when the benefits are less than the costs.

False Signup and view all the answers

What are the two strategies that Olando’s team is considering?

Introduce a new range of low-sugar soft drinks or select suitable products from overseas. Signup and view all the answers

A good cost–benefit analysis _____ opportunities.

identifies Signup and view all the answers

Why is a cost–benefit analysis particularly important in commerce?

It determines if an option is a good decision or investment. Signup and view all the answers

Olando’s team found that there is a saturated market for low-sugar cola alternatives.

False Signup and view all the answers

What is the first step of a cost–benefit analysis as applied to Olando's case?

Identify opportunities in the market. Signup and view all the answers

Match the following elements of a good cost–benefit analysis to their descriptions:

Identifies opportunities = Recognizes potential market gaps Calculates costs = Estimates all financial expenditures Proposes alternatives = Suggests different strategies to pursue Compares costs and benefits = Evaluates if results justify the investment Signup and view all the answers

Study Notes

Market Research

Market research is the process of gathering and analyzing information about customers and business opportunities.
It helps entrepreneurs make better decisions by understanding consumer behavior.
Retailers use loyalty cards to gather data about customers, including their gender, age, address, and household size.
This data helps businesses build customer profiles and promote products more effectively.

Market Research Process

Determining information needs: Clearly define the problem and determine what information is necessary.
Collecting data: Gather information from primary sources (original data like surveys and focus groups) and secondary sources (existing data like research reports and census data).
Analyzing and interpreting data: Analyze the data to understand its meaning and significance.

Cost-Benefit Analysis

A cost-benefit analysis examines and compares the strengths and weaknesses of different alternatives.
The principle is to only choose an alternative if the benefits outweigh the costs.
It's useful for making decisions, comparing alternatives, and estimating resources needed.
A good cost-benefit analysis identifies opportunities, proposes alternatives, calculates costs and benefits, compares results, and informs decision-making.

Business Location

A good location can significantly impact a business's success, especially for retail businesses.
Factors to consider include:
- Access to foot traffic
- Online presence
- Home-based options
Location affects sales and operating costs.
Businesses aim to maximize revenue and minimize costs.

Demographics

Demographics are population characteristics that influence consumer spending, including age, ethnicity, gender, marital status, family size, and income.
Understanding demographic trends helps businesses identify potential customers.
Example: The ratio of working-age individuals (15-65) to pensioners (>65) in New South Wales shows a changing demographic landscape.
This data provides insight into the future workforce and spending patterns.

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Description

Dive into the essentials of market research and gain insights into customer behavior and decision-making processes. Learn about the various steps involved, from determining information needs to analyzing data. This quiz will help you understand how businesses utilize data to enhance marketing strategies.