Key Terms

Market Segment - A group of customers with similar characteristics to each other, for example the over 60ís.It can also be defined as a subsection of a section of a larger market.

Market Size - The size of a market in terms of volume of sales or value of sales. (Assuming value is price x quantity)

Market Growth - The percentage rate at which the size of a market is increasing.

Market Share - The percentage of a particular market accounted for by sales of a particular firm. The firm with the most sales has the largest market share and is subsequently known as the market leader.

Primary Research - Research carried out by or on behalf of a firm which is specific to that firmís needs. Also referred to as field research.

Secondary Research - Research used by a firm or company which has already been carried out by some other source. Includes government statistics.

Sample - A subset of a market chosen for research purposes because it is too expensive or unrealistic to interview every member of the target market. The bigger the sample the more likely it is that it will be representative of the market.

Random Sample - A sample in which every member of the population has an equal chance of being selected.

Stratified Sample - A sample which is chosen so that it reflects the composition of the market being researched. I.e. if one third of customers are female then one third of the sample will be female.

Quota Sample - A means of getting a stratified sample. Researchers are told to interview a particular quota of certain types of people so that the final sample reflects the composition of the market.

Quantitative Research - Research which involves the use of numbers in its results for example number of people who buy a product.

Qualitative Research - Research which does not involve numbers, instead involving a response which reveals what people think of a product.

Confidence Level - A measure of how reliable a firm thinks itsí research is. For example a 95% confidence level means the firm believes that the research is likely to be accurate 95 times out of a hundred.