3.2.1 Methods of market research (3)
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1.
Question 2: A clothing retailer wants to understand customer preferences for new designs. They decide to conduct primary market research using focus groups. Evaluate the advantages and disadvantages of using focus groups as a primary market research method. (12 marks)
Advantages of using focus groups:
- In-depth insights: Focus groups allow researchers to gain detailed insights into customer opinions, attitudes, and motivations.
- Interactive discussion: The group dynamic can stimulate discussion and reveal unexpected perspectives.
- Flexibility: The moderator can adapt the discussion based on the responses of the participants.
- Qualitative data: Focus groups provide rich qualitative data that can be used to understand the 'why' behind customer behaviour.
- Identifying new ideas: The interactive nature of focus groups can spark new ideas for product development and marketing.
Disadvantages of using focus groups:
- Small sample size: Focus groups typically involve a small number of participants, which may not be representative of the entire target market.
- Groupthink: Dominant personalities can influence the discussion, leading to groupthink and biased results.
- Moderator bias: The moderator's questions and behaviour can influence the responses of the participants.
- Time-consuming and expensive: Organising and conducting focus groups can be time-consuming and expensive.
- Difficult to generalise: Findings from focus groups may not be easily generalisable to the wider population.
Conclusion: Focus groups are valuable for gaining in-depth understanding of customer preferences, but the retailer must be aware of the limitations related to sample size and potential bias. Careful moderation and a well-defined participant selection process are crucial to ensure the validity of the findings. The retailer should consider combining focus groups with other research methods to validate the insights gained.
2.
Question 3: A small business is planning to expand its operations into a new geographical area. Discuss the potential advantages and disadvantages of using online surveys as a method of secondary market research to assess the viability of this expansion.
Answer 3:
Using online surveys as secondary market research for geographical expansion presents both advantages and disadvantages:
Cell | Description |
Cost | Relatively low cost compared to traditional methods. |
Time | Quick to distribute and collect responses. |
Reach | Can reach a large and diverse audience. |
Data Quality | Potential for low response rates and biased results (e.g., only people with internet access). |
Data Relevance | May not accurately reflect the local market if the survey is not tailored to the specific geographical area. |
Advantages: Online surveys are cost-effective, quick to administer, and can reach a wide audience. They provide valuable insights into consumer preferences and market conditions in the target area. Disadvantages: Response rates can be low, and the results may not be representative of the entire population if access to the internet is uneven. The survey questions need to be carefully designed to be relevant to the specific geographical area. There is also the potential for bias, as those with internet access are more likely to participate.
3.
A supermarket chain is considering introducing a new range of organic vegetables. They conducted a survey of 120 customers to gauge interest. The results are shown in the table below:
Option | Number of Respondents |
Organic Vegetables | 60 |
Non-Organic Vegetables | 30 |
No Preference | 30 |
Identify two limitations of this market research data and suggest one way the supermarket chain could improve its research methods.
Two limitations of this market research data are:
- Small Sample Size: A sample size of 120 customers may not be representative of the entire customer base of the supermarket chain. The results might be skewed if the sample doesn't accurately reflect the demographics of all potential customers.
- Limited Detail: The survey only asks about interest in organic vs. non-organic vegetables. It doesn't explore *why* customers have a preference (or lack thereof). It doesn't gather information on price sensitivity, willingness to pay a premium for organic, or specific types of organic vegetables desired.
Improvement: The supermarket chain could improve its research methods by conducting a follow-up survey with a larger and more diverse sample. This could include:
- A larger sample size (e.g., 300+ customers) to increase the reliability of the results.
- Including open-ended questions to understand *why* customers prefer organic or non-organic vegetables. For example, "What are your reasons for preferring organic vegetables?" or "What factors influence your decision to buy vegetables?".
- Asking about price sensitivity – "How much more would you be willing to pay for organic vegetables compared to non-organic vegetables?"