Types of Market Research (DP IB Business Management)
Revision Note
Why Conduct Market Research?
Market research is the objective collection, compilation and analysis of information about a market
Effective market research helps a business to:
Reduce risk when launching new products or entering new markets
Identify and understand the future needs and wants of customers
Determine potential gaps (market niches) in the market which can be exploited to increase the sales volume
Identify competitors and gauge their potential strengths and weaknesses
Market research helps the business make informed decisions about the most effective way to use their valuable resources and develop an appropriate marketing mix
On-going market research helps businesses keep their marketing strategy in line with customers changing needs and preferences
Primary Market Research
Primary research is the process of gathering information directly from consumers in the target market using field research methods such as surveys, interviews, etc
This gathers information that is new and does not necessarily exist in any format
Businesses can choose from a range of primary market research methods and may combine a selection of methods to obtain comprehensive first-hand data
Primary Market Research Methods
Method | Explanation | Advantages | Disadvantages |
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Surveys |
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Observation |
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Interviews |
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Test marketing |
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Focus groups |
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Businesses need to take care to choose a method of primary market research that allows them to capture the correct form of data that can support decision-making
Each method has a range of advantages and disadvantages which must be considered when making this choice
Evaluation of Primary Market Research
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Traditionally, primary research has been relatively difficult and expensive for businesses to gather
The rise of social media platforms such as Facebook, Twitter, Instagram and TikTok has changed this and now provides businesses with incredible primary research opportunities
The speed of communication between businesses and customers can be almost instantaneous e.g. by using online polls thousands of responses can potentially be received in several hours
The cost of gathering this information can be very low e.g. Online polls take a few minutes to set up and software automatically gathers and analyses the results
Social media helps businesses to generate an interactive relationship with their customers which helps to strengthen brand loyalty
Customers are also able to feedback quickly on products - or to express innovative ideas about how they want the products to be changed
This feedback may help the firm to develop extension strategies in their product life cycle
Secondary Market Research
Secondary research involves the collection, compilation, and analysis of data that already exists
Diagram: sources of secondary research
Government publications: National governments and trading blocs such as the EU publish reports and statistics on topics such as the economy, demographics, industry trends and consumer behaviour
Academic institutions: Universities and research institutions conduct studies and publish research papers which provide valuable insights and data on specific industries, consumer behaviour and market trends
For example, Stanford University is a globally significant research centre for engineering and medicine
Industry associations: Trade associations and industry-specific organisations provide detailed information about specific sectors, including market size, growth rates and industry benchmarks
E.g. The International Organisation of Motor Vehicle Manufacturers conducts and collates research on production and sales statistics
Specialist market research reports: Companies specialising in market research produce and sell in-depth reports on various industries, markets and consumer trends
E.g. Mintel is one of the leading private companies supplying market research infromation
Financial reports: Public limited companies are required to publish financial reports, including annual reports which can provide valuable information about a company's performance, market position, and future plans
Online databases: There are various online databases and research platforms that provide access to a wide range of secondary market research
E.g. Statista and Euromonitor International
Media sources: Newspapers, magazines and online publications often contain articles, opinion pieces and investigative reports that can offer insights into market trends, consumer behaviour and industry developments
E.g. The Financial Times and the Wall Street Journal
Businesses must weigh up the reliability of secondary market research and aspects such as cost, relevance and availability of data should also be carefully considered
Evaluation of Secondary Market Research
Advantages | Disadvantages |
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Quantitative & Qualitative Data
Market research data can be quantitative or qualitative
Quantitative data is based on numbers and could include financial reports (e.g. sales, costs), market data (e.g. markets share) or summaries of data gained from primary research (e.g. on a scale of 1-10 rate our customer service)
Qualitative data gathers descriptions or explanations based on conversations, discussions, impressions, and emotional feelings and is usually gathered through primary research
Both forms are useful and any data analysis should ideally include a combination of the two
Limitations of Qualitative & Quantitative Research Data
Limitations of Qualitative Data | Limitations of Quantitative Data |
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Exam Tip
When answering questions about theory-rich topics like market research it is tempting to write down everything you know about the subject.
Try to focus more on weighing up the advantages and disadvantages of market research methods and justifying which method(s) might be more appropriate - and explain why in context.
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