Methods of Market Research (AQA GCSE Business)

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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 research gathers information which is new and does not already exist in any format

    • The most commonly used methods of primary market research include surveys, interviews based on questionnaires, observation, focus groups and test marketing 

  • Businesses usually carry out primary research with a sample of the target market in which they are interested

    • A sample is a group of respondents that reflects the characteristics of the target market as a whole 

    • The larger the sample size, the more likely it is that research results will reflect the views of the target market as a whole

  • A business will often use more than one method of primary research in order to build up a reliable understanding of the market

    • The data can then be analysed and used to make data-led judgements such as how much to charge for a new product and where to sell it

Methods of Primary Research

Method

Explanation

Surveys

  • The most widely used method of gathering primary research

  • A questionnaire is used to ask a series of questions to a certain number of people (respondents)

  • Surveys can be conducted by telephone, online or face-to-face

  • A wide range of respondents can be reached using online survey tools such as Survey Monkey

Observation

  • This involves hiring someone to stand in an appropriate location to study consumer behaviour in a store or judge consumer traffic at a particular location

    • Researchers may observe the impact of packaging on consumer choice, or the impact that the particular placement of a product in a store may have on consumer choice

Interviews

  • Questions may be set up in a very similar way to a survey, however, an interviewer asks the questions

  • This method takes longer but does allow the interviewee to ask follow up questions and gather information, which can easily be missed when conducting surveys

Focus groups

  • Free range discussions led by a marketing specialist with the aim of collecting detailed feedback on all aspects of the marketing mix from the target market

  • Usually limited to a small group of 12–15 people who are rewarded for their time

  • The group typically meets for 90 minutes to 3 hours

  • Primary market research should be able to answer many of the specific questions businesses have about their customers, competitors and market conditions

  • However, it can be costly to conduct

    • Small businesses are likely to be limited on the type and scale of primary research they conduct

Evaluating Primary Market Research

Advantages

Disadvantages

  • Information gathering is focused on the needs of the business and will not be available to its rivals

  • The sample size may be too small and unrepresentative of target customers, leading to unreliable results

  • Some primary research methods allow in-depth information to be gathered from respondents, such as reasons for certain behaviour or choices

  • Bias may mean that researchers can guide respondents to answer questions in a particular way

    • Similarly, respondents may be influenced by the responses of others or provide inaccurate information

  • Primary market research is up-to-date, can be used to ask specific questions and will therefore be more relevant to business decisions

  • A business may need to hire a specialist market research agency to make the process more expensive and time-consuming

Secondary Market Research

  • Secondary research involves the collection, compilation, and analysis of data that already exists

Diagram: Secondary Research Sources

Sources of secondary research include market research reports, government publications, financial reports, online databases, the media, online surveys, academic institutions and industry associations

Businesses can consult a wide range of secondary sources to gather market research data

Diagram explanation

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

    • E.g. 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 information

Financial reports

  • Public limited companies are required to publish 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 make a large volume of data on international commerce available

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

    • Aspects such as cost, relevance and availability of data will affect the decision on which secondary data to use

Evaluating Secondary Market Research

Advantages

Disadvantages

  • Information is already available and may be quicker to collect than primary research, thereby saving time

  • Information is often free (e.g. government websites and internet sources such as Statista) and cheaper to collect, leading to lower costs compared to primary research

  • Suitable for a small business that lacks a large marketing budget and/or expertise

  • Information has been collected for other purposes and so may be difficult to analyse, may lack relevance or may not be factually correct, e.g. Wikipedia 

  • It can be expensive to purchase market-specific secondary data from specialist companies, e.g. MINTEL reports

  • Information may be out-of-date, especially in dynamic markets

Choosing Appropriate Market Research Methods

  • Businesses often use a combination of different market research methods to gain a comprehensive understanding of the market, consumers, and competition

  • Their choice of market research methods depends on a range of factors, including:

1. The research objectives

  • If a business wants to gather in-depth insights and understand consumer motives, qualitative methods like focus groups or in-depth interviews may be the most suitable

  • If the business simply wants to measure market size, identify consumer preferences, or measure market trends, quantitative methods like surveys or data analysis may be more appropriate

2. Target audience

  • The geographic location and how easy it is to communicate with the target market can influence the choice of research method

    • If the target audience is spread across a wide geographical area, online surveys or phone interviews may be more practical than in-person focus groups or face-to-face surveys

3. Level of detail required

  • Qualitative methods like interviews provide detailed insights but are more time-consuming and expensive to carry out

  • Quantitative methods like surveys can cover a larger sample size but may lack the depth of qualitative methods

4. Resources

  • Businesses with limited budgets may not be able to afford very detailed research

  • Those requiring market research quickly or have limited human resources to carry out research may only be able to access secondary market research

5. The nature of the product

  • Testing a physical product may require in-person focus groups or product trials

  • Researching a service or digital product may be better suited for online surveys or beta testing

Examiner Tip

You may be asked to analyse the benefits of carrying out market research for a particular business. In these 6-mark questions, you need to ensure that your chain of argument includes repeated reference to the business context.

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