Market Research

Market research
Primary and secondary research
Introduction:
 Secondary or desk research involves the collection of secondary data
 It can be
o Internal data: records within the business
 Existing market research reports
 Sales figures
 Reports from members of sales force
 Annual report and accounts published by the company
 Stock movements
 Business intranet
o External data: sources outside the business

 Information from competitors
 Government publications
 Social trends
 The census of population
 Annual abstract of statistics
 International publications
 By organisation such as World Bank and IMF
 Commercial publications
 Research agencies conducting research on particular markets for
selling
 Retail audits
 Due to use of EPOS this is much easier.
 General publications
 Internet, magazine, newspapers etc.
 Primary research or field research involves collecting primary data. This is information that did
not exist before the research began.
o Small businesses does it themselves large businesses often use market research agencies
o Most primary research are done by either asking questions to the consumers or
monitoring their behavior
o Since it will be very expensive and time consuming to conduct a primary research on
every consumers of the target population, it is often conducted on a sample
 A sample is a representative of the total target market.
Types of primary research:
 Observation and recording:
o Researchers observe and record how consumers behave
 E.g. observing people at shops to judge their purchasing behavior, stock check
to see sales over time
 However
 Results can be distorted, if people are aware of being watched and
behave differently because of this.
 Explanation of behavior cannot be found out
 Test marketing:
o It involves promoting and selling the product in a limited geographical area and then
recording consumer reactions and sales figures.
o Test marketing reduces the risks of a new product launch failing completely
o However accuracy will lack if the total population does not share the same characteristics
and preferences as the region selected.
 Consumer surveys:
o This involves asking the consumers or potential consumers for their opinions and
preferences.
o Uses questionnaires.
 A questionnaire is a series of questions designed to find out the views of and
opinions of a respondent.
 Must be designed to meet the needs of the business carrying out the survey.
o Can take many forms
 Personal interview:
 Involves interviewer-collecting interview from one person face to face.
 The interviewer fills up the questionnaire, which have the following
benefit
o Thus interviewees can give detailed responses to questions
o Also long and difficult questions can be explained by the
interviewer
 However this method can be time consuming and accuracy greatly
relies on the skills of the interviewer.
 Telephone interview:
 Interview via telephone
 Cheaper than personal interviewing and cover wide geographical area
 However often distrusted by public and only possible to ask short
questions.
 Postal surveys:
 These involve the use of questionnaires sent consumers through post.
 Cheap, no interviewer bias, and can reach wide geographic area
 However, response rate can be poor and questions must be short so
detailed response cannot be gathered. Also questionnaire must be well
designed and easy to understand if they are to work
 Focus groups:
 Involve a group of customers being brought together on one or a
number of occasions.
 They answer and discuss questions prepared by market researchers
 The discussions are often recorded which are used by the researchers
to draw inference about the subject matter.
 Cheap and easy since it involves only a small number of customers.
 However
o The small number of consumers might not be accurate
representation of the target market.
o The data gathered is only qualitative in nature.
o The opinions of the customers can be influenced by any one
influential member within the group
Things to be considered while writing a questionnaire:

 There should be a balance between open and closed questions
 The questions must be clear
 Questions must not be leading in nature
 The questions must be able to collect quantifiable information
 Must not contain technical questions or terms if it is to be self-completed.
Benefits and drawbacks of primary research:

 Benefits
o Updated
o Relevant
o Confidential
 Drawbacks
o Costly
o Time consuming
o Doubts over accuracy and validity due sampling error.
Benefits and drawbacks of secondary research:

 Benefits
o Cheap
o Assists in primary research
o Quickly obtainable
o Allows comparison from different sources
 Drawbacks
o May not be updated
o May not be relevant or entirely suitable
o Data collection method and accuracy is unknown
o Might not be available for completely new products.

Market Research - Primary and Secondary Research

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Primary and secondary research

o External data: sources outside the business

Things to be considered while writing a questionnaire:

Benefits and drawbacks of primary research:

Benefits and drawbacks of secondary research:

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