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Questions and Answers
Why is market research important?
Why is market research important?
- To reduce competition in the market
- To create new products
- To increase the size of the potential market
- To understand the level of investment needed (correct)
What does a small potential market mean for a company?
What does a small potential market mean for a company?
- The company should offer discounts on the product or category
- The company should invest heavily in the product or category
- The company should not invest in the product or category (correct)
- The company should target a different market
What should a company do if the potential market is large?
What should a company do if the potential market is large?
- Offer discounts on the product or category
- Target a different market
- Not invest in the product or category
- Invest in product or category development, modification, marking, and promotions (correct)
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Study Notes
Market Research Importance
- Conducting market research is crucial to understand consumer needs, preferences, and behaviors to create effective marketing strategies and increase sales.
- Market research helps companies identify potential opportunities, estimate market size, and assess competition.
Potential Market Size Impact
- A small potential market implies limited demand, making it challenging for a company to generate significant revenue and achieve long-term growth.
- A small potential market may lead to a higher marketing cost per customer, reducing profitability.
Large Potential Market Strategies
- If the potential market is large, a company should invest in marketing efforts to increase brand awareness and capture a larger market share.
- Companies should focus on product development, differentiation, and pricing strategies to meet the needs of a large and diverse customer base.
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