3.2 Market research

NSL is a business based in country X. It manufactures food products including bread and breakfast cereals. NSL uses lean production in its factory. Maintaining quality is important. NSL imports 15% of its raw materials. Changes in country X’s exchange rate can affect businesses which import raw materials. NSL’s Marketing Manager knows the business should respond to changes in consumer spending patterns. She is aware that market research can be used to help make business decisions.

(e) Explain two methods of market research a business could use to help make business decisions. Which is likely to be the best method for a manufacturing business to use? Justify your answer. [6]

Amir and Carla are business partners. They own a luxury hotel which operates in a niche market. The business has a short hierarchical structure. Amir and Carla use Herzberg’s theory of motivation to keep their 5 employees well motivated. Amir and Carla are considering opening another hotel in a different city. They will need to identify a suitable source of finance if they decide to expand. Secondary market research can be used to help a business decide whether it should expand.

(e) Do you think secondary market research is the most appropriate type of market research for a business to use when deciding whether it should expand? Justify your answer. [6]

Mitchell is an entrepreneur. He wants to start up a business selling books. As part of his business plan Mitchell has carried out some market research. An extract is shown in Fig. 2.1. Mitchell will use microfinance as a source of finance. He wants to know whether the opportunities of using ecommerce for a new business are greater than the threats.

Explain how the market research data in Chart 1 and Chart 2 in Fig. 2.1 could help Mitchell when making decisions. [6]
Chart 1:
Explanation:

Chart 2:
Explanation:

PLY manufactures hats in its factory in country X. The economy of country X is in a recession. PLY sells its hats online to the mass market. It uses email to communicate with its customers. PLY uses market research when making decisions. The Managing Director is considering ways for PLY to
become more environmentally friendly as she is aware of new legal controls over business activity. She is also aware of the role of pressure groups.

(e) Explain two reasons why a business uses market research. Which reason is likely to be the most important? Justify your answer. [6]

Meena wants to leave her job as a teacher to become a successful entrepreneur. Her business will produce handmade jewellery. Meena knows that there is government support for business start-ups. She plans to use market research to help identify a market segment for her jewellery. Meena’s brother has offered to become her business partner but she cannot decide whether it would be better to operate as a sole trader.

Do you think accessing government sources, such as statistics, is the best method of market research for a start-up business to use? Justify your answer. [6]