3.2.1 Methods of market research (3)
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1.
A clothing retailer conducted a survey to determine the popularity of different clothing styles among its customers. They asked 50 customers which of the following styles they preferred: Casual wear, Formal wear, and Sportswear. The results are presented in the pie chart below:
[Imagine a pie chart here - representing the following percentages: Casual wear - 40%, Formal wear - 30%, Sportswear - 30%]
Analyse the pie chart and explain two possible reasons for the distribution of preferences.
The pie chart shows the distribution of clothing style preferences among 50 customers: 40% prefer casual wear, 30% prefer formal wear, and 30% prefer sportswear. Casual wear is the most popular style, followed by formal wear and then sportswear, with both the latter two being equally popular.
Possible Reasons for the Distribution:
- Demographics of the Customer Base: The retailer's customer base may be predominantly young adults or individuals who lead active lifestyles. This would explain the high preference for casual wear and sportswear. A younger demographic is more likely to favour casual and sporty clothing.
- Marketing and Product Availability: The retailer may have a wider selection of casual wear and sportswear available compared to formal wear. Effective marketing campaigns focusing on casual and sporty styles could also contribute to their popularity. If the retailer heavily promotes casual wear through advertising and in-store displays, this would likely influence customer preferences.
2.
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?"
3.
A business is planning to launch a new range of eco-friendly cleaning products. Describe three different sources of secondary research the business could use to gather information about the market demand for such products. For each source, explain what type of information it would provide and its potential limitations.
Here are three sources of secondary research a business could use:
- Competitor Websites:
Information Provided: Competitor websites often reveal information about their product ranges, pricing strategies, target markets, and marketing campaigns. This can provide insights into current trends and consumer preferences. You can analyse their product descriptions, customer reviews (if available), and promotional materials.
Limitations: Competitor websites may present an overly positive view of their products. The information might be outdated or incomplete. It doesn't necessarily reflect the entire market demand, only the competitor's perspective.
- Government Sources:
Information Provided: Government sources (e.g., statistics agencies, environmental agencies) provide valuable data on consumer spending, environmental regulations, and market size. This can include data on recycling rates, consumer attitudes towards sustainability, and government policies related to eco-friendly products.
Limitations: Government data can be broad and may not be specific to the business's target market. The data might be delayed and require careful interpretation. It may not directly address the demand for *specific* eco-friendly cleaning products.
- Market Reports:
Information Provided: Market reports (often available from market research firms) offer in-depth analysis of specific industries, including market size, growth forecasts, consumer demographics, and competitor analysis. They often include detailed statistics and trends.
Limitations: Market reports can be expensive to purchase. The information might be biased towards the firm that produced the report. The data may not be entirely up-to-date, especially in rapidly changing markets.