The purpose of market research relating to: demand, competition, target market.

What is Market Research?

Think of market research as a detective mission. You gather clues (data) about what people want, who else is selling similar things, and who you should aim to sell to. The goal? Make smarter business decisions.

Demand tells you how many units people want at a given price. A simple linear demand equation:

$Q = a - bP$

• $Q$ = quantity demanded
• $P$ = price
• $a, b$ = constants that depend on the market

🔍 Analogy: Imagine a vending machine. The more you raise the price, the fewer snacks people buy. That’s the demand curve sliding down.

Competition analysis looks at:

1. Number of rivals
2. Market share distribution
3. Strengths & weaknesses (SWOT)
4. Pricing strategies

📈 Example: If three companies sell the same energy drink, you need to know who offers the best flavour, price, and branding.

Define your ideal customer using:

• Demographics: age, gender, income
• Psychographics: interests, lifestyle
• Behavioural: buying habits, brand loyalty

🧩 Analogy: Think of a treasure map. Your target market is the X that marks the spot where your product will be most valuable.

1. Define Objectives – e.g., “Find out how many students would buy a new eco‑friendly water bottle.”
2. Choose Methods – surveys, interviews, observation.
3. Collect Data – use questionnaires, online polls.
4. Analyse Findings – look for patterns, calculate averages.
5. Report & Decide – present results to stakeholders.

📊 Tip: Keep your questions simple and use emojis to make surveys more engaging.

Step 1 – Demand: Survey 200 students → 60% say they’d buy a low‑calorie chip if priced at £1.50.

Step 2 – Competition: 3 brands in the school canteen. Brand A: £1.20, Brand B: £1.50, Brand C: £1.80.

Step 3 – Target: 15‑18 year olds, active on Instagram, health‑conscious.

Result: Position your snack at £1.50 with a social‑media launch campaign.

• Use clear headings to show structure.
• Include real‑world examples (e.g., a local shop).
• Show cause‑effect relationships between demand, competition, and target market.
• Use bullet points for lists – keeps answers concise.
• Remember to cite sources if you reference data.

💡 Remember: The examiner looks for understanding and application, not just facts.