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Assess the possible limitations of secondary market research to restaurant chain companies, such as Jamie Oliver’s. - Edexcel - A-Level Business - Question 1 - 2022 - Paper 3
Question 1
Assess the possible limitations of secondary market research to restaurant chain companies, such as Jamie Oliver’s.
Worked Solution & Example Answer:Assess the possible limitations of secondary market research to restaurant chain companies, such as Jamie Oliver’s. - Edexcel - A-Level Business - Question 1 - 2022 - Paper 3
Step 1
Limitations of secondary market research
Answer
Secondary market research can often prove expensive to acquire, such as detailed market intelligence reports provided by firms like MINTEL, which can cost over £1,000. Additionally, there is no guaranteed accuracy for this data; its relevance can decline quickly, particularly in the fast-changing food industry, as noted on platforms like Wikipedia, which may present biased or outdated information.
Another significant limitation is that Jamie Oliver’s restaurant chain is a private limited company. This means competitors, such as Leon, may have more access to valuable market information. While the available data might not focus specifically on the behaviors unique to Jamie Oliver's restaurants, it may encompass broader trends that do not apply to its specific market strategy.
Step 2
Counter-balancing factors
Answer
Despite the limitations, secondary market research can be immediately available and often less costly than primary research approaches. It allows restaurant chains to keep up with rapid changes in consumer preferences, an essential factor in the volatile dining sector. While gathering current trends is critical, primary research can be resource-intensive and time-consuming. Therefore, secondary research presents a practical option for assessing market dynamics alongside competitors.
Step 3
Judgment on the use of secondary market research
Answer
The effectiveness of secondary market research heavily depends on the purpose of the data collected. If Jamie Oliver’s aimed to identify prospective customers or gauge new trends within the market, secondary sources such as free Government (National Statistics) reports could have provided valuable data. However, reliance on secondary research without incorporating primary data could result in a limited understanding of specific market challenges faced by the restaurant chain.