Primary Market Research (Cambridge (CIE) O Level Business Studies)

Revision Note

Primary Research

Primary market research is the process of gathering information directly from consumers in the target market
- This process gathers information that does not already exist and is specific to the needs of the business collecting it
Surveys, interviews and focus groups are common primary market research methods
- Many of these methods make use of questionnaires to organise research questions and responses

Primary Market Research Methods

Method	Explanation
Surveys	Surveys are the most widely used tool to gather primary research Surveys may be face-to-face, online, carried out by telephone or by post A series of questions are posed to a defined number of people (respondents) A wide range of respondents can be reached using online survey tools such as Survey Monkey
Observation	A market researcher studies consumer behaviour during their interaction with a business E.g. Shoppers may be accompanied as they shop in a store or consumer traffic is measured at a particular location and time Common focuses for observation include The impact of packaging on the products consumers select The impact that the placement of a product in a store may have on consumer choice
Interviews	A more formal meeting than a survey between a researcher and a customer Questions may be similar to those in a survey but the interviewee may be asked follow-up questions to gather detailed information as well as cues such as body language
Test marketing	Free samples are provided for a limited period to the target market to gauge their response to the product Recipients of samples are asked to review products and provide detailed feedback to allow changes to be made before the product is formally launched
Focus groups	Free-range discussions led by a marketing specialist collect detailed feedback on all aspects of the marketing mix from the target market Usually limited to a small group of 12-15 people who may meet more than once Group members are usually rewarded for attendance

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

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 behaviours or choices	Bias may mean that researchers 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 and can be used to ask specific questions and so will be more relevant to business decisions	A business may need to hire a specialist market research agency to help making the process expensive and time-consuming

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 provides businesses with incredible primary research opportunities
- The speed of communication between businesses and customers can be almost instantaneous
  - Online surveys or polls allow large numbers of responses to be received in a short period of time
- The cost of gathering this information can be very low
  - Online polls take a few minutes to set up and software automatically gathers and analyses results
Online businesses can collect primary market research via electronic means
- Customers are also able to feedback quickly on products, or to express innovative ideas about how they want the products to be changed
  - Feedback may help a business to develop [popover id="xNJ82r9tu3_RRhsS" label="extension strategies"] in a product's life cycle

The Purpose of Sampling

Primary market research is conducted with a small representative sample of the market as a whole
- It would be both too expensive and time-consuming to collect data from the whole market
- Market researchers use carefully designed sampling methods from which accurate conclusions can be drawn about likely customer preferences and behaviour
- In general, the larger the sample size, the more likely it is that results of market research activities will reflect the market as a whole

Comparison of Different Sampling Methods

Method	Explanation	Advantages	Disadvantages
Quota	Specific proportions of each group of the population are selected to participate in research E.g. a focus group for a car manufacturer may include a sample of 25% respondents between the ages of 18-24, 50% between the ages of 25-45 and 25% aged 46+	Suitable for research where there is a time limit to conduct the study Relatively easy and low cost	Not random so there is some risk of bias Need to understand the population to be able to apply results to the market as a whole
Random	This method makes sure that every member of the population has an equal chance of being selected E.g. a survey of gym members may be sent to a random selection of clients in its membership database	Simple to design and interpret As anyone in the population can be asked to participate, bias should be avoided	As anyone may be selected, the sample may not be representative of the market as a whole A complete and accurate list of all consumers in the target market would eliminate bias, but is unlikely to be available
Convenience	This method uses those who are willing to volunteer and are easiest to access in the study E.g. a cafe owner may ask regular customers to fill out a written survey during a quiet period regarding their experiences of the menu and customer service	Respondents taking part in research are readily available Large amounts of information can be gathered quickly	The sample is likely to be biased if those known to the researcher are chosen The sample is unlikely to be representative of the market as a whole

The choice of sampling method will depend upon a wide range of factors, including
- Time available
- Knowledge of the target population
- Skills of the researcher(s)

Where little time is available to carry out market research a quota sample may be the most appropriate sampling method as it is usually very quick and straightforward to organise
Where a business has a good knowledge of the target population a random sample is likely to provide a set of research data that lacks bias and can be interpreted with insight
Where researchers lack experience or expertise in market research a convenience sample is likely to provide a useful set of data that can be easily interpreted

Examiner Tips and Tricks

A research population refers to the group of people in whom the business has an interest when conducting market research, not the population of the entire country.

Last updated: 23 October 2024

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