Edexcel IGCSE Business: Market research and the market (4BS1) – Revision Notes

These notes condense Topic 4, sections 4.1 Market research and 4.2 The market, from the Pearson Edexcel International GCSE in Business (4BS1) specification, Issue 2, February 2026. Read the study guide for full explanations. Then test yourself with the practice questions. Course links: the Edexcel IGCSE Business hub, the printable checklist and the free diagnostics. Both Paper 1 (small business, up to 49 employees) and Paper 2 (large business, more than 250 employees) can draw on this topic. Method strengths and weaknesses, the distinctions table and the market share formula are standard teaching, not specification text. Amounts below are in dollars and the businesses are invented.

4.1.1 Purpose of market research

Market research is collecting and analysing information about customers, competitors and the market.

Purpose	One-line application
Identify and understand customer needs	Find what customers want and will pay
Identify gaps in the market	Find a want that nothing meets well
Reduce risk	Evidence before spending on a launch
Inform business decisions	Price, product, location, stock levels

4.1.2 Methods

Primary = collected first-hand for this business. Secondary = already exists, collected by someone else.

Type	Method	Remember
Primary	Survey	Asking a sample; counts well
Primary	Questionnaire	Written questions; cheap, low response rate
Primary	Focus group	Small group discussion; explains why; small sample
Primary	Observation	Watch behaviour; shows what, not why
Primary	Test marketing	Limited real sale before full launch; realistic but slow
Secondary	Internet	Fast and cheap; quality varies
Secondary	Market reports	Detailed; may cost money
Secondary	Government reports	Trusted and wide; may be dated or general

Method in steps: recommending a research method

1. State what the business needs to find out.
2. Note its limits: budget, time, size.
3. Compare two or three methods using cost, speed and accuracy.
4. Choose one, justify it with the scenario, and name one drawback.

Primary versus secondary

	Primary	Secondary
Cost	Higher	Lower
Time	Longer	Shorter
Fit to question	Exact	May not fit
Rivals can see it	No	Often yes

4.1.3 Data

Term	Meaning	Example
Quantitative	Numbers; how many or how much	35% would buy weekly
Qualitative	Opinions and reasons; why	“The box is hard to open”

Social media: cheap, quick, direct contact with customers (polls, comments, reviews). Risks: unrepresentative respondents, fake or biased accounts.

Reliability checklist: sample size, representative sample, bias in questions, age of data, source. Unreliable data raises the risk of a wrong decision.

Small worked reminder

Sample 400 people, 50 would buy the new product.

50 / 400 x 100 = 12.5%

If the 400 were all students at one school, the sample would not represent all customers, so 12.5% could mislead.

4.2.1 Importance of marketing

• Satisfying customer needs: more sales, fewer returns.
• Building customer relationships: valued customers return.
• Keeping customer loyalty: repeat custom, word-of-mouth, lower cost than winning new customers.

Must-know distinctions

Pair	Difference
Market orientation vs product orientation	Starts from customer wants (research) vs starts from what the business makes
Niche vs mass marketing	Small specialised segment vs the whole market
Primary vs secondary research	First-hand vs existing
Qualitative vs quantitative	Words and reasons vs numbers
Survey vs questionnaire	In standard usage: the exercise of asking a sample vs the written question list
Sales vs market share	Value of a firm’s sales vs its percentage of total market sales

Market share (standard form; the specification gives no formula)

Market share (%) = (business sales / total market sales) x 100

Worked reminder: Quillan Teas sells 18,000 in a market worth 90,000.

18,000 / 90,000 x 100 = 20%

Rearranged: if share is 12.5% and the market is 160,000, sales = 0.125 x 160,000 = 20,000.

Share can stay the same when sales rise, if the whole market rises at the same rate. Share can fall when sales rise, if the market grows faster.

Market analysis: studying market size, growth, competitors’ shares and customer trends, then using it to decide whether to enter, expand or leave.

	Niche	Mass
Strength	Less competition; premium price possible	Large volume; economies of scale
Weakness	Small base; exposed if niche shrinks	Strong competition; thin margins

4.2.2 Responding to market change

Change	Possible response	Watch out for
Changing customer needs	Research again; adapt or drop products	Cost of change
Changing spending patterns	Value range; price changes; new sales channel	Lower profit per sale
Increased competition	Improve quality or service; change prices; promote more; find a niche	Price wars reduce profit

4.2.3 Market segmentation

Dividing a market into groups with shared features so product, price and promotion can be aimed at them.

Basis	Cue words
Location	Region, city, urban or rural
Demographics	Gender, family size, occupation
Lifestyle	Habits, values, interests
Income	Low, middle or high earners
Age	Children, teenagers, adults, older adults

Benefit: less wasted spending, better-fitting product. Cost: research expense and the risk of ignoring other segments.

Percentage change reminder

Percentage change = (new - old) / old x 100

Worked reminder: household spending on takeaway meals in Wexbury falls from 80 to 72 a week.

(72 - 80) / 80 x 100 = -10%

Quote the direction (a fall of 10%). Use the old figure as the divisor.

Segmentation in action

Business	Basis used	Likely marketing decision
A cafe near offices	Location	Open early, sell quick lunches
A toy maker	Demographics	Advertise in magazines read by parents
A hiking shop	Lifestyle	Sponsor a walking club
A jeweller	Income	Stock premium items, higher prices
A mobile phone provider	Age	Cheap data plans for teenagers

Link the basis to a decision, as above, and the explanation is complete.

Using command words

Command word	What to do
State, identify	Give the answer briefly; no development needed
Define	Say what the term means
Calculate	Show the formula and working, then the answer with its unit or percent sign
Explain	Give a point, then a reason or consequence
Analyse	Break the information down and link causes and effects, using figures
Evaluate	Weigh both sides in context, then give a reasoned judgement
Justify, recommend	Choose an option and support it with reasons from the scenario

Linking the ideas

Research feeds marketing decisions. Research (4.1) tells a business what customers need and where the gaps are. Market share and market analysis (4.2.1) show how it is doing against rivals. Changing needs, spending or competition (4.2.2) trigger new research. Segmentation (4.2.3) turns research results into a chosen target group. A good scenario answer often joins two of these.

Method in steps: evaluating a market response

1. Say what has changed (needs, spending or competition) and use any figure given.
2. Offer a response and say how it addresses the change.
3. Give a benefit and a drawback, such as extra sales against lower profit per sale.
4. Judge which response suits this business, given its size, budget and customers.
5. State the condition that would change your view, such as research showing the change is short-lived.

Method in steps: working out market share

1. Find total market sales, not a rival’s sales.
2. Divide the business’s sales by the market total.
3. Multiply by 100 and write the percent sign.
4. Compare years, and state whether share rose, fell or stayed the same.

Quick self-test

1. State two purposes of market research.
2. Is a government report primary or secondary research?
3. Name one weakness of a focus group.
4. Is “customers say the shop feels crowded” qualitative or quantitative?
5. A business sells 27,000 in a market worth 180,000. Calculate market share.
6. State one reliability concern about a social media poll.
7. Define niche marketing.
8. Give one response to increased competition.
9. Name the five bases for segmentation given in the specification.
10. Explain why higher sales do not always mean higher market share.

Answers

1. Any two of: identify and understand customer needs, identify gaps in the market, reduce risk, inform business decisions.
2. Secondary.
3. Any one of: small sample, strong voices dominate, costs time, results are opinions not counts.
4. Qualitative.
5. 27,000 / 180,000 x 100 = 15%.
6. Respondents may not represent all customers; some accounts may be fake or biased.
7. Targeting a small, specialised part of the market.
8. Any one of: improve quality or service, change prices, increase promotion, find a niche.
9. Location, demographics, lifestyle, income, age.
10. If the total market grows as fast or faster, the firm’s share stays the same or falls.

Where marks are usually lost

• Listing a purpose or method with no link to the business in the scenario.
• Confusing primary and secondary research, especially government reports and market reports.
• Saying a method is “cheap” or “quick” without comparing it with another method.
• Describing quantitative data as “facts” and qualitative data as “opinions” with no example.
• Dividing market sales by the firm’s sales instead of the other way round.
• Writing “market share goes up” when only sales were given.
• Naming a segmentation basis without saying how the business would use it.
• Giving a response to competition with no drawback in an evaluation answer.
• Skipping the judgement in a recommendation question.

Frequently asked questions

What are the purposes of market research in Edexcel IGCSE Business? The 4BS1 specification lists four: to identify and understand customer needs, to identify gaps in the market, to reduce risk and to inform business decisions.

What primary research methods are in the 4BS1 specification? The specification lists surveys, questionnaires, focus groups, observation and test marketing as primary methods, and the internet, market reports and government reports as secondary methods.

What is the difference between niche and mass marketing? Niche marketing targets a small, specialised part of the market, often with higher prices and less competition. Mass marketing targets most of the market with a standard product, giving large volumes and economies of scale but strong competition.

Does a rise in sales mean a rise in market share? Not necessarily. If the whole market grows at the same rate as the business’s sales, market share stays the same.

Official syllabus

Pearson Edexcel International GCSE in Business (4BS1), Specification, Issue 2, February 2026, published by Pearson Education Limited. Topic 4: Marketing, sections 4.1 and 4.2, points 4.1.1 to 4.2.3.