4.4 Market research: Practice Questions

A business decides to collect data by conducting a series of focus groups to understand the underlying motivations behind consumer choices. This type of data collection is best described as:

An electronics company wants to test a new smartphone prototype with a specific demographic: tech-savvy teenagers in urban areas. They decide to use a non-probability sampling method where the researcher finds a few initial subjects and then asks them to recommend others. This is known as:

A firm plots its historical advertising expenditure against its sales revenue on a scatter diagram. The resulting line of best fit shows a strong positive correlation with a coefficient close to \(+0.9\). Which of the following is the most accurate management interpretation of this data?

Which sampling method ensures that every member of the target population has an equal and known chance of being selected for a survey?

A marketing manager is reviewing a government report on national demographic trends to identify potential new markets. What is the main advantage of using this specific source of data?

Market research can be categorized into qualitative and quantitative.

(a) Compare the use of focus groups versus large-scale surveys for a company planning to rebrand its logo. [4]
(b) Explain the role of snowball sampling in researching a niche market of collectors of rare vintage watches. [3]

A multinational beverage company is conducting market research to launch a new energy drink. They have collected the following data from a stratified sample of 1,000 participants:
- \( 65\% \) of participants preferred a 'natural' caffeine source.
- The margin of error is \( \pm 3\% \) at a \( 95\% \) confidence level.

(a) Distinguish between quota sampling and stratified sampling. [2]
(b) Explain why using a secondary market research source, such as a published industry report on beverage trends, might be beneficial before conducting this primary research. [2]
(c) Explain the importance of the 'margin of error' for the marketing manager when finalizing the product formula. [2]