Component 1

1.3 Market Research

Name:

MEG: Aspirational MEG:

1
 What you will learn in this unit…

MARKET RESEARCH

What is meant by market research?

Explain the value of carrying out market research

Distinguish between primary and secondary market research

Distinguish between qualitative and quantitative data

Explain the different methods of primary and secondary research

Explain the issues involved in selecting which research to use

Interpret and evaluate qualitative and quantitative research

Explain what is meant by sampling

Explain the difference between quota and random sampling

Understanding the need to avoid bias in market research

Evaluate the usefulness of sampling for businesses and stakeholders

2
Key Terms
The vocabularly that I need to learn for this unit of work is:

Primary Research (Field): Data that Quota Sample: Selecting groups of

is collected first-hand for a specific
purpose. Examples include
questionnaires and focus groups.
Secondary Research (Desk): Data
that already exists but was collected
for a different purpose and is not
therefore specific to your needs e.g.
company reports or internet websites.
Random Sample: When everyone
within a target population has an equal
chance of being asked.
respondents in proportion to the
consumer profile within a target market.
Qualitative Data: Data based upon the
motives behind consumer buying
behaviour. It asks ‘why’ questions and
is non-numerical.
Quantitative Data: Numerical data that
examines questions such as ‘how
many’. It analyses a market in
mathematical terms.

Sample: The mathematical process of Bias: The risk of data being skewed and
selecting a group of respondents that therefore invalidating the results. It is
best represent the views of the larger often due to sampling or interviewing
target population. errors.

Market Research: The on-going process of gathering and analysing information about
the market, the competition and consumers within a firm’s target market.

Stakeholder: An individual or group with a vested interest in the activities of a business

e.g. pressure group or employees.

Confidence Level: The degree of statistical significance for a set of data. Businesses
aim for 95% confidence meaning the data is right 19 times out of 20.

Sample Size: The number of people interviewed. The larger the size of the sample, the
greater degree of statistical significance the results assume.

3
 Activity: Business Enterprise Continued

Team Roles

Dig out your notes from Booklet 1.1 Enterprise and Business Plans. It’s now time
to decide what roles each team member will be in charge of. You will need to be
really organised and know exactly what you are doing.

In order to do this each team member will have a title and be in charge of that
part of the enterprise activity.

Fill in the boxes below with the name of the person and why they are the best
team member for the job. Remember that if your team is only small some team
members might have to have more than one role.

Team Leader

Finance and
Costing

Stock and
Purchasing

Creative
designer

Company
Secretary
4
 Action Plan

You will need to complete an action plan so you know what you are going to do and
when you are going to do it. You may not stick to the dates of the action plan, but
it will be a guide so you know what team member is doing what task.

Fill in the table below, completing each section.

Research
Task Description Date Team
Member

5
Now that you have decided the roles of each team member it’s time to start
researching your enterprise idea.

Complete each of the tasks below and make sure you PRINT off your evidence to
put into your booklet.

1) Start looking at other similar businesses that sell the same products as you
or offer the same service.
2) Find 5 products that are similar to yours and get some pictures to put into
your booklet.
3) Looking at the other businesses products/services think about what ideas
you can use from their products/service.

You need to keep a list of all the websites that you have used while doing your
research. Fill in the table below making sure you reference each website.

Website Date

6
Market Research Findings

NAMES OF FIRMS SELLING SIMILAR GOODS/SERVICES

HOW CAN YOU DIFFERENTIATE YOUR PRODUCT/SERVICE?

(Differentiate means what is going to make your item different and
stand out in the market?) Explain your differentiation methods.

7
Stick in 5 images of similar products/services from your research.

What ideas are you able to make use of from these rival goods and
services?

8
Product Design (1)

Design and label 2 products that you might sell. You can use your research to help
you.

9
Product Design (2)

Once you have designed your two products, decide what one will be the best to sell.
You might want to sell the two products, but remember that will take more time
and effort.

10
Material Research

You now need to start researching what materials you will need in order to make
your products. If it is a service that you are offering then you will need to explain
exactly what your service requires.

In the table below list all the materials or products that you will need to buy in
order to make your own products.

Think about the following:

 What materials will you need to create your own products

 Where will you buy the materials from?
 How much material will you need?

Material Were From Quantity (how much)

11
Costing

You now need to figure out how much it will cost you to make your products. This
involves you using the research you found in the last section (Quantity).

You need to find out how much it will cost you for all of your materials and you
then need to find the total.

Fill in the table below: (Use your table from the last task to help you)

Material Quantity (how much) Cost

Total:

£
12
Pricing

Once you have figured out how much it costs to buy all your materials you can now
start to decide what price to sell your products/service at. You need to think
about the following:

 You need to make sure that you are making a profit

 You need to make sure you don’t make too many products (or else you might
not sell them all and lose money)

To work out how much each product will cost you to make follow this simple plan.

Step 1

Add the cost of all your materials together.

Step 2

Divide the total cost by the amount of products you want to make.

Step 3

This will give you the Unit cost for each product.

Step 4

Decide how much extra you are going to charge. This will be your profit per
product sold.

Step 5

Add up how many you sold and work out how much extra money you got. This will be
your total profit.

Here is a simple example:

Sally spent £10 on materials (step 1)

She wants to make 10 cupcakes so… 10 divided (/) by 10 = 1 (step 2)

This means that each cake costs her £1 to make (step 3)

She wants to sell the cakes for £1.50 (step 4)

Sally will make 50p profit for each cake she sells (step 5)

13
Pricing (Continued)

You can now work out how much you are going to charge and what your profit will
be.

14
Target Audience

Every product or service will have a target audience. The target audience is the
person that the product is aimed at. You need to decide who your target audience
is. Think about the following:

 Who is going to buy your product?

 What does your product do?
 How is your product designed?

Briefly outline who your target audience is. Remember that your customer is also
your target audience.

15
TASK 2: Presentation of Business Ideas
In your enterprise groups you are to produce a 2 to 3 minute ‘Dragon’s Den Style’ pitch.
Your presentation should include one visual aid and should contain the following
information and anything else that might be considered to be relevant.

 Brief history about the group and your skills

 What is your idea?
 Why do you think that your idea will be a success?
 What evidence have you collected to support your idea?
 What possible problems do you think that you might face in getting the idea to
market? How do you plan to overcome these?
 Demonstrate the financial viability of your product or service.

This is not a copy and paste exercise from the company website, the presentation must be
all in your own words unless you are quoting. Be prepared to answer questions at the end!

Brief history about the members of the Enterprise

What is your enterprise all about?

16
Why do you think that your enterprise will be a success?

What market research evidence do you have to support your idea?

What problems do you expect to face? How do you plan to overcome these?

Outline why your enterprise idea is financially viable.

17
Presentation Marking Criteria

Criteria A B C D E F
Knowledge and Student shows Students show Students can Students show Students show No clear
understanding extensive a good demonstrate an a basic some evidence understanding
knowledge of knowledge of understanding understanding of of the topic
the topic the topic of the topic of the topic understanding and no opinions
supported by supported by and can however finds the topic, formulated.
own opinions. opinions. formulate a it hard to however
basic opinion. formulate explanation is Information
Argument their own very basic and does not flow
should be Argument Information opinions. no real thought and no
coherent. should be should flow has gone into coherent
information coherent. effectively Information formulating an argument
should flow information flows however opinion.
smoothly should flow inconsistently
smoothly
Delivery and Student should Student should Student may Student finds Student No effort
performance be confidant show signs of show signs of it hard to contributes shown and no
when speaking being being nervous speak in front little to the contribution
and have a confidant when in parts of class. delivery of the towards the
presence. speaking and however However presentation. delivery of the
Student should have a delivery was effort is made Little effort is presentation
be able to presence. OK overall. and some parts made to speak at all.
engage the Student’s are out and the
audience giving presentation Student should communicated parts they do
full eye should be try and make effectively. say are
contact. interesting. the communicated
presentation Reliance on poorly.
Furthermore Furthermore interesting by notes in order
student should student should communicating to deliver Heavily reliant
be able to be able to main points presentation. on notes to
communicate communicate effectively. deliver
effectively effectively presentation.
with little if with some help Student can
any help from from use notes etc.,
resources resources to help with
outside of the outside of the presentation.
PowerPoint. PowerPoint.
Presentation Overall quality Overall quality Overall quality The quality of Overall quality No effort or
quality of PowerPoint of PowerPoint of PowerPoint the PowerPoint of the contribution
slides is slides is slides is ‘OK’ slides is PowerPoint shown towards
‘EXCELLENT’ ‘GOOD’ Use of images inconsistent. slides is ‘POOR’ to development
to support Images are Images used of the
Appropriate Appropriate understanding. used but not sometimes and presentation
use of images use of images effectively. not slides.
to support to support effectively.
arguments and arguments and Slides look Slides are Slides are not
information. information. good however inconsistent Slides do not completed or
not consistent. and most are demonstrate irrelevant.
Slides are Slides are cluttered with understanding
visually visually Slides are very lots of and are not No opinions
appealing appealing with informative but information really relevant developed at
supported by evidence of lack application that is not to the topic. all.
good use of understanding of own opinions. needed.
knowledge and demonstrated No opinions
understanding. within some No real signs developed at
slides. of developing all.
an opinion are
present within
the slides.

18
 Response to
questions Presence

Argument

Communication
Flow and
Structure

Clarity

19
Body Language Voice
 CASE STUDY 1

20
21
 CASE STUDY 2

22
23
QUICK QUESTIONS

1. Explain one possible benefit of marketing research to a business about to launch a new social
networking app. (5)

2. Explain one advantage of primary market research compared to secondary market research
when a business is considering launching a new product. (5)

3. State two possible uses of marketing research in decision making. (2)

4. State two ways in which a business might gather primary data. (2)

5. Distinguish between quantitative and qualitative data. (2)

6. State two ways in which a business might gather secondary data. (2)

7. Distinguish between random and quota sampling methods. (2)

8. Explain why an understanding of market data is an important part of future business success.
(5)

EXAM SKILLS

Explain

If you are asked to explain something, then you should provide details and reasons for how and why
something is the way it is. You should also include in your response a clear meaning of what it is that
you have been asked to explain and be sure to include sufficient detail so that any cause and effect
(impact) is communicated as part of your answer. Where appropriate look to include examples to make
your explanation stronger and clearer. Be guided by the number of marks available for the question as
to how much detail is required.

Identify

If you are asked to state, name, list or identify something then you should provide brief facts or
examples. There is no requirement to write in a lot of detail for these command words.

Distinguish

If you are asked to distinguish, then you should identify and explain the differences between two or
more concepts, theories or approaches, making these points of difference very clear, by using
examples to support your points. You should demonstrate your knowledge and understanding, by
perhaps providing a definition or describing the characteristics of those things that you have been
asked to distinguish.

24
 CASE STUDY 3

25
26
Create a Revision Mind map for Market Research and Sampling

27
Theory Notes

28
29
30
31
32
33
34
35
36
37
Sampling Methods and Exercises

38
39
40
41
42
43
Sampling Activity

44
Exam Questions

45
End of Unit Self-Assessment & Progress Review

Areas that I have fully understood about market research.

Areas that I don’t have fully understood about market research.

My action plan to address this is as follows:

46
Tick off your areas of strength in the boxes above.

Which areas do you reckon that you still need to strengthen?

END OF UNIT TEST MARK:

END OF UNIT GRADE:

TEACHER COMMENT/AREAS TO DEVELOP:

47