CAIE A-Level Business 3.2 Market research Question Bank

Crafty Toys (CT)

CT is a co-operative that produces and sells a range of wooden toys, such as puzzles, cars and dolls. The co-operative was formed in 2020 by a group of 12 people who share a passion for making toys. They wanted to work together to create quality products that would appeal to children and parents. No one person takes on the role of manager; instead, they share the traditional manager functions between them.

CT operates from a large workshop in a rural area of country Z, making toys using labour-intensive techniques. CT uses locally sourced wood that is certified as eco-friendly. CT also uses natural paints and finishes that are safe and non-toxic for children. Table 1.1 shows CT's output in 2024.

CT sells its products online through its own website and social media platforms, as well as through some independent retailers who specialise in ethical products. The co-operative

also attends various trade fairs and exhibitions to showcase its products and network with potential customers and suppliers. CT has never researched customer wants.

CT faces some challenges in its current operations. These challenges include:
- high costs of production
- a long lead time
- a requirement for skilled workers.

CT is considering changing to flow production to overcome these challenges.

Analyse two methods of primary market research that CT could use to identify customer wants.

The Research Agency (TRA)

TRA is a quaternary sector business. It is the market leader in providing social media data to food manufacturers in country F. TRA's market has grown by 40% over the last year.

DF is a multinational business that specialises in non-alcoholic drinks. DF has asked TRA for data about a new bottle of water with pod attachments. The pods give a fruity flavour which is combined with sparkling water. TRA has sampled 8000 potential consumers on social media to identify their favourite fruity flavour (see Fig. 1.1).

TRA employs 65 researchers. Since 2020, all of these employees work from home. They are provided with all the necessary IT equipment and a high-speed internet connection. However, motivation is poor, and this has led to high labour turnover. The Human Resource Director has received some feedback from employees. Fig. 1.2 shows some of this feedback.
- I hate being so isolated - I never get to speak to any other employees.
- I have to use my own electricity, and the cost has doubled in the last two years.
- I know some employees are not working very hard, but they get paid the same as me. It's not fair!

Direct News (DN)

Shila and Lucy own and manage DN, an online publishing business. DN produces a daily online local newspaper called QNews. Readers pay a subscription to access QNews. DN's mission statement is: 'to be a daily community newspaper for local people, about local people'.

DN recently tested a monthly online magazine aimed at the 18-30 age group called QLine. DN's plan is to stop publishing QNews and produce only QLine. Secondary market research suggests QLine will be popular with national businesses wanting to promote their products.

Shila is aware that revenue from online newspapers is decreasing. However, she has found national market research data about online monthly magazines (see Table 2.1).

Shila thinks that before the business decides to produce QLine, more market research data will be needed. Shila and Lucy will have to decide on new objectives for DN.

To ensure a quality product that meets customer expectations, Lucy thinks it is important to have careful management of the supply chain, from content creation to customer delivery.

Popular Drinks (PD)

PD is a mass market fizzy drinks manufacturer in country Z. The fizzy drinks market in country Z is dominated by a few well-known brands. The total market value is $ 5.3 bn and the PD brand has a 17% share of this market.

Pablo was recruited to be the Marketing Director of PD in 2022. He launched a new promotional campaign based on trending music on social media. He decided to use social media influencers to focus on this market.

Online feedback of the campaign was poor. Many of PD's customers did not want to be associated with trending music. National news highlighted the negative feedback and PD's sales volume decreased by 20% within a week and continued falling. This led to excess inventory in PD's warehouses. The bad publicity also caused a drop in PD's share price and a negative impact on cash flow.

Fig. 2.1 shows feedback from a recent questionnaire where previous PD customers were asked what they thought about the promotional campaign.

Pablo has called an emergency meeting of PD's marketing managers to repair the damage done to the PD brand from this recent promotional campaign.