Chapter 11:

Market Research
1. T&T is a small business which sells many
different types of garden tools. It is well known
for selling tools of high quality. Sales of its
products are growing very quickly. Its Managing
Director (MD) feels that the market research isn’t
the most important factor contributing to the
success of the business. However, the MD does
want primary research to be carried out before
developing a new type of lightweight garden tool
which is designed to be used by elderly gardeners.
a) Define ‘primary research’.
The collection of original data. It involves directly collecting information from
existing or potential customers.

b) Identify two methods of primary

market research.
Examples of primary market research methods include questionnaires and online survey
and so on.

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c) Outline two ways of presenting market
research data on existing products that T&T
could use.
Way 1: A chart
This can be a bar chart or pie chart which shows the total figure for each piece of data
in terms of the total number. For example, if T&T sells its gardening products to
several countries, a pie chart can show which of the countries have they sold the most
of their products to.
Way 2: A graph
This is used to show the relationship between two sets of data. For example, ‘how
total cost changed over year’.

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d) Explain two factors which should be taken into
account by T&T when trying to ensure the research
information is accurate.
Factor 1: The size of the sample
It is impossible to ask the opinion of everyone in a population which is why a sample is used.
The larger the sample, the more the results are sure to be accurate. However, a larger
sample will cause the research to be more expensive. On the other hand, if only a small
sample is asked, the results will not be so accurate. Therefore, the researchers have to
decide the size of the sample to give them the accuracy they want and can afford.
Factor 2: The wording of the questions
They can try giving questionnaires to a small group of people before using them on a large
sample. This will allow them to identify if any of the questions can be misinterpreted and
needs to be rephrased.
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e) Do you think market research is necessary before T&T
develops the new product? Justify your answer.
Yes, i think market research is necessary before T&T develops the new product as this allows the business to
find out how many people would want to buy their product it is planning to offer for sale. If there is not a
big market for the product, a large amount of money could be wasted developing a product that not many
people will buy. It will cause the business to fail. If market research is carried out, the business could find out
many things from the opinions of the sample group. For example, ‘Would customers be willing to buy the
new product that is coming out?’ or ‘What feature of their product do customers most like and dislike?’
These questions will allow the business to evaluate their product and improve it so that it will sell better in
the market.

No, I think market research is not necessary before T&T develops the new product as an accurate market
research, in this case primary research, can be expensive and time-consuming to collect the data.. On the
other hand, if secondary research data is used, the data can be out of date and not relevant to the business.

In conclusion, yes i think market research is necessary as it will allow the business to understand more about
customers’ wants and opinion about the product which can lead them to develop a better product that will
sell well in the market.
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2. H&H has recently designed a new app for the
iPhone. It will allow people to control electronic
devices in their home when they are not there.
Phone users in many different countries will be
likely to want to download this app. The Managing
Director wants the Marketing department to
carry out secondary research rather than primary
research before launching this new app. There are
very few competitors in the market for this type
of app.
a) Define ‘secondary market reesearch’
The collection of information that has already been made available by others. Second-hand
data about consumers and markets is collected from already published sources.

b) Identify two sources of secondary market

research data which could be used by H&H
Market research agencies: these agencies carry out market research on behalf of the
company and provide detailed reports.

Internet: H&H could research from the internet as it will have a wide range of articles about
companies, government statistics, newspapers and blogs.

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(c) Outline two advantages to H&H of using
secondary market research.
Advantage 1: It is cheaper to gather information rather than primary research as the
data collection has already been done by others.

Advantage 2: It is quicker to obtain secondary data than primary data because

secondary data is usually industry-specific information.

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(d) Explain two reasons why accurate market
research information is important to H&H.
Reason 1: Customers get the best experience
It is important that phone users get the best experience the first time, instead of
mistakes made, so that they will only share their happy experience of the app with
their peers. If they encounter only a moderate experience in the app, they might not
be likely to share the app with their peers or leave a average review in the app store.
Reason 2: Bad reputation of the company
If the company designs an app that users do not like, they will likely never return to
download apps from the same company again. Furthermore, bad reviews on the app
store reflect badly on the image of the company as other people will not even
consider to download the app after looking at the reviews.
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(e) Do you think the Managing Director is right to want to
only carry out secondary research? Justify your answer.
Yes, I think the Managing Director is right to want to only carry out secondary research
because it can be used to help access the total size of a market by finding out the size
of the population and its age structure. Usually, they are cheap to obtain. However,
they might be out of date data.
No, I think the Managing Director is not right to want to carry out secondary research
because primary research data is up to date and more relevant to the company. This
way, their data will be more accurate. However,they can be expensive to undertake
and is not available immediately.
In conclusion, I think the Managing Director is not right to want to carry out secondary
research because having the most accurate data as possible is extremely important
when developing an app.

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