CS Market Research & Analysis 3 — Questions and Answers
Question 1: Which analytical framework helps a strategist evaluate the attractiveness of a market by examining supplier power, buyer power, competitive rivalry, substitutes, and new entrants?
- PESTLE analysis
- Porter's Five Forces (Correct answer)
- McKinsey 7-S Framework
- Ansoff Matrix
Correct answer: Porter's Five Forces
Porter's Five Forces model assesses industry structure and profitability potential through five competitive forces that shape every market.
Question 2: A strategist notices that two variables — ad spend and sales volume — have a correlation coefficient of 0.91. What conclusion is MOST appropriate?
- Ad spend directly causes sales volume increases
- There is a strong positive association between ad spend and sales volume (Correct answer)
- A 1% increase in ad spend produces a 0.91% increase in sales
- The relationship is statistically significant without further testing
Correct answer: There is a strong positive association between ad spend and sales volume
Correlation measures association strength but does not establish causation; additional analysis (e.g., regression, controlled experiments) is needed before claiming a causal link.
Question 3: What distinguishes a leading indicator from a lagging indicator in market analysis?
- Leading indicators are more accurate; lagging indicators have more historical data
- Leading indicators predict future performance; lagging indicators confirm past trends (Correct answer)
- Leading indicators are quantitative; lagging indicators are qualitative
- Leading indicators are internal metrics; lagging indicators are external benchmarks
Correct answer: Leading indicators predict future performance; lagging indicators confirm past trends
Leading indicators (e.g., consumer confidence, new orders) signal future market direction, while lagging indicators (e.g., GDP, unemployment) confirm trends after they have occurred.
Question 4: A company is entering a market with few comparable products. Which market sizing approach is MOST appropriate?
- Bottom-up analysis using sales force estimates
- Top-down analysis using analogous market data and proxy metrics (Correct answer)
- Conjoint analysis of willingness to pay
- Regression analysis of historical sales data
Correct answer: Top-down analysis using analogous market data and proxy metrics
When direct market data is scarce, top-down analysis using analogous markets or proxy metrics provides a reasonable baseline estimate for a nascent market.
Question 5: Which research design is BEST suited to establish causality between a marketing intervention and consumer behavior?
- Cross-sectional survey
- Longitudinal panel study
- Randomized controlled experiment (A/B test) (Correct answer)
- Observational ethnographic study
Correct answer: Randomized controlled experiment (A/B test)
Randomized controlled experiments (A/B tests) isolate the effect of a single variable by randomly assigning subjects to treatment and control groups, enabling causal inference.
Question 6: When conducting a competitive intelligence analysis, which source type carries the HIGHEST risk of bias or misinformation?
- SEC 10-K filings and annual reports
- Patent database searches
- Competitor press releases and marketing materials (Correct answer)
- Industry analyst reports from Gartner or Forrester
Correct answer: Competitor press releases and marketing materials
Competitor press releases are self-promotional and selectively disclose information, making them the least objective source compared to regulatory filings or independent analyst research.
Question 7: A market research firm reports that a survey result is significant at p < 0.05. What does this mean for a strategist?
- There is a 95% probability that the finding is practically meaningful
- There is less than a 5% probability that the result occurred by random chance (Correct answer)
- The effect size is large enough to drive strategic decisions
- The sample is representative of the total population
Correct answer: There is less than a 5% probability that the result occurred by random chance
A p-value < 0.05 means there is less than a 5% probability of obtaining the observed result if the null hypothesis were true, indicating statistical — not necessarily practical — significance.
CS Market Research & Analysis 3
Which analytical framework helps a strategist evaluate the attractiveness of a market by examining supplier power, buyer power, competitive rivalry, substitutes, and new entrants?