Evaluate market-research methods, samples and data quality to justify marketing decisions in IB Business Management HL cases.
Fru-Yo (FY)
Fru-Yo (FY) produces premium-priced yoghurts. FY has strong brand loyalty and relies only on word-of mouth promotion. FYs target market is consumers who may have health problems.
FY created two new zero-sugar fruit yoghurts. FY did no market research into the new yoghurts but is confident that FYs brand loyalty will ensure success. The market constantly changes because competitors regularly introduce new healthy yoghurts.
Table 2 shows forecasted financial information for the two new zero-sugar fruit yoghurts, Yoghurt A and Yoghurt B.
Table 2: Forecasted financial information for FY's new zero-sugar fruit yoghurts
Explain one reason why F Y should carry out market research into Yoghurt B.
Enjuice
Enjuice produces canned juices. The market for canned juices is very competitive. Each can is sold at $ 8. Enjuice's profit margins are falling. The marketing manager has conducted primary market research and suggested increasing advertising to increase sales. In 2018 Enjuice sold 360000 cans.
Table 1: Selected financial information for 2018 (all figures in \$000s)
State two methods of primary market research.
Music Mania (MM)
Music Mania (MM) is an independent store selling new and used music compact discs (CDs), DVD films and music vinyl records. It is a sole trader business owned by André, who has 25 years of experience in the retail and music business. M M has loyal customers but its total revenue is falling. The store currently has a low market share in DVDs and vinyl records.
André decided to conduct some primary and secondary market research, as the entertainment industry is changing rapidly. He discovered that:
- the market for DVDs is in rapid decline
- CD sales are declining slowly but new releases still sell well
- MM has had to stock computer games, which are selling out very quickly, and the sales of new vinyl records are growing slowly.
André is accustomed to variations in sales but the current sales forecasts are, in his experience, the most worrying. He has decided to create an e-commerce website to increase his sales of new and used vinyl records and CDs. André is also aware that new free online music streaming and gaming sites are being launched.
André has only limited internal sources of finance to set up the website. Two new tactics to ensure future success for M M being considered are:
- to stop selling DVDs
- to increase below-the-line promotional spending on vinyl records.
Define the term secondary market research.