Methods of Market Research (Edexcel IGCSE Business)

Primary 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 
    
    

• 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

An Explanation of the Methods of Primary Research

Evaluating Primary Market Research

• 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
    
    

The Advantages & Disadvantages of Primary Market Research

Secondary Research

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

Diagram: Secondary Research Sources

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

• 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
    
    

Evaluating Secondary Market Research

• 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
  
  

Advantages & Disadvantages of Secondary Market Research