IB Business Management HL 4.4 Market Research Topic Practice

Sock Paradise (SP)
After conducting primary market research, Pam opened Sock Paradise (SP), which sells colourful socks. SP operates a retail stall in a large department store and sells online through its own website.
Table 2 shows selected financial data for SP for 2020.

At the end of 2020, the department store told Pam that it would increase rent by $14000 per year starting on 1 January 2021. Pam forecast total sales for 2021 as 18000 pairs of socks; other costs and prices were forecast to remain unchanged.

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. MM 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 MM being considered are:
- to stop selling DVDs
- to increase below-the-line promotional spending on vinyl records.

Define the term secondary market research.

Turners


Turners is a famous hotel located in a large city. It is positioned as having the highest quality of customer service and most of the employees have worked for Turners for over ten years. Regular customers like knowing the employees at reception and other areas of the hotel. Many customers have commented on the unique style of customer service at Turners. They like the fact that the people in the photographs used in promotional materials are actually the people they interact with when staying at Turners.
Turners has an expensive, award-winning restaurant. Turners had used a price skimming strategy with room rates at over $\$1000$ per night. However, new competition from three other recently opened hotels and other changes in the external environment have resulted in revenue becoming more cyclical. Profits are falling.
Surprisingly, the General Manager, Shane Peterson, also received some negative customer feedback from a random sample of customers. Firstly, they claim that Turners' online booking system is slow and unreliable. Customers complain of an overbooked restaurant and untidy leisure facilities. Business customers argue that the newer competing hotels offer better customer service, high-speed internet and other business services for no extra charge. As a result, Shane is reviewing Turners' marketing mix.
Shane has to focus on improving customer service as well as reducing costs. He is considering two options:
- Reducing labour costs by implementing Handy's shamrock organization.
- Outsourcing Turners' staff training programme. Currently, it uses an internal, on-the-job staff training programme where experienced staff train new employees.
The cost savings from using Handy's shamrock organization would reduce salaries and wages by 7 %. Outsourcing Turners' staff training programme would reduce training costs by 9 %. These combined savings could allow Turners to offer high-speed internet and other business services for no extra charge to customers.

Identify two key features of random sampling.