Market Research (Edexcel GCSE Business)
Revision Note
Written by: Steve Vorster
Reviewed by: Jenna Quinn
The Purpose of Market Research
Market research is the objective collection, compilation and analysis of information about a market
Effective market research will help the business
To reduce risk when launching new products or entering new markets
To identify and understand the future needs and wants of customers
To identify potential gaps (market niche's) in the market which can be exploited to increase the sales volume
To identify competitors and gauge their potential strengths and weaknesses
Market research helps the business to make informed decisions about the most effective way to use their valuable resources
Market research enables the firm to develop the correct marketing mix
On-going market research helps businesses to keep changing their marketing strategy in line with customers changing needs and preferences
Methods of Market Research
The process of market research is broadly classified into two categories - primary and secondary 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 the use of surveys, interviews based on questionnaires, observation, focus groups and test marketing
Secondary research involves the collection, compilation and analysis of data which already exists
Typical methods include:
Using the internet
Purchasing market reports from specialist companies such as Mintel
Accessing government research which provides useful information e.g The Office for National Statistics (ONS)
An Explanation of the Methods of Primary Research
Method | Explanation |
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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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The use of data in Market Research
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
The Limitations of Qualitative & Quantitative Research Data
Limitations of Qualitative Data | Limitations of Quantitative Data |
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Using Social Media to Collect Market Research Data
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 provided businesses with incredible market research opportunities (and some threats too!).
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 results
Social media helps businesses generate an interactive relationship with their customers, which helps to strengthen brand loyalty
Customers are also able to provide feedback quickly or express innovative ideas about how they want the products to change
This feedback may help the firm develop extension strategies in their product life cycle
Examiner 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 benefits and drawbacks of market research methods and justifying which method(s) might be more appropriate - and explain why in context.
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