If a company is planning to introduce a new breakfast cereal, marketing staff might meet with focus groups to find out what types of cereal people like, and why they like them. This would help the company develop a product people would want to buy.

•  Clearly defines a problem and leads to possible solutions.
•  Is usually conducted through in-depth interviews with a relatively small number of people.
•  Often includes open-ended questions designed to generate ideas or identify opportunities for the entrepreneur.
   

 

If a company is planning to change the design on a cereal package, they might survey a large group of consumers to find out which of several proposed package designs the consumers like best.
 

•  Yields specific information regarding a clearly defined problem.
•  Is typically used with a large group of consumers.
•  Often includes multiple-choice questions.
   

If cereal sales suddenly declined, the company could try to determine what factors caused people to change their buying patterns.
 

•  Explains the relationship between a particular cause and its effect.
•  Is typically used in situations where a particular incident has caused a particular result, for example, where sales have increased or decreased because of changed prices.