Emirates is reviewing its market research before promoting a new direct route for business travellers. The airline has bought an industry report showing pas...
Question 1 Report
Emirates is reviewing its market research before promoting a new direct route for business travellers. The airline has bought an industry report showing passenger numbers on similar routes, average fares and the growth of video meetings. This is secondary research. Emirates also plans to email a questionnaire to members of its frequent-flyer programme. The email asks customers to select their most important factor when choosing a flight: price, departure time, baggage allowance or airport location. The research budget could instead be used for telephone interviews with 25 companies.
(a) Define the term secondary market research. [2]
(b) State two advantages of Emirates purchasing the industry report. [2]
(c) Calculate the cost per company interview if the telephone-interview budget is £1,500 and 25 companies are interviewed. Show your working. [3]
(d) State three reasons why Emirates should include an option such as “other” in its email question. [3]
(e) Analyse which option Emirates should select: buying the industry report, emailing frequent flyers or conducting telephone interviews with companies. [10]
Answer Details
(a) Secondary market research is information that has already been collected by another person or organisation, and is then used by the business for its own research. [2]
(b) Purchasing the report is quicker than collecting new data and may cost less than carrying out a large primary survey. It also provides market-wide data on passenger numbers and fares, allowing Emirates to compare similar routes. Any two valid advantages gain credit. [2]
(c) Divide the total interview budget by the number of companies interviewed:
\[£1500\div25=£60\]
The cost is £60 per company interview. [3]
(d) An other response is important because a customer may value a factor not listed. It avoids forcing the customer to select an inaccurate answer, and it can reveal unexpected decision factors that improve future questions and the validity of the research. Any three points gain credit. [3]
(e) The industry report gives broad existing evidence about similar routes, fares and market size, so it is useful as a quick starting point. However, its findings may not be specific to Emirates' proposed route or its particular business-traveller customers.
Emailing frequent flyers can reach many known customers cheaply and provides quantitative data about stated preferences. However, frequent flyers may be more loyal and travel more often than typical passengers, so they may not represent the whole potential market.
Telephone interviews with companies can provide detailed evidence about corporate travel needs, such as booking policies and required departure times. This is particularly relevant because the route is aimed at business travellers. However, 25 companies is a small, relatively costly sample at £60 each.
A strong decision is to use the industry report first for market size and route comparisons, email frequent flyers for a larger low-cost survey, then interview a small number of important companies for detailed evidence. This combines breadth, low cost and relevant detail rather than relying on one limited source. [10]
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