Primary Market Research (AQA A Level Business): Revision Note

Primary marketing 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 gathers information that is new and does not necessarily exist in any format

• Businesses can choose from a range of primary market research methods and may combine a selection of methods to obtain comprehensive first-hand data

Surveys

• The most widely used method of gathering primary research is to use sampling by using surveys

  • A series of questions are posed tp a certain number of people (respondents)

  • The results from the ‘sample’ are used to make inferences in which the results of the sample are extrapolated to be true for the wider population

• 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 and study consumer behaviour in a store or perhaps judge the potential 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

• The 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 the information that can easily be missed when conducting surveys

Test marketing

• Free samples are provided for a limited period to the target market to gauge their response to the product

• Adjustments to the product or other elements of the marketing mix can be made following feedback

Focus groups

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

• Usually limited to a small group of 12-15 people

• The group typically meets for 90 minutes to 3 hours

• Businesses need to take care to choose a method of primary market research that allows them to capture the correct form of data that can support decision-making

  • Each method has a range of advantages and disadvantages, which must be considered when making this choice

Evaluation of primary marketing research

Technology and market research

• 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 changed this and now provides businesses with incredible primary research opportunities

  • 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 the results

  • Social media helps businesses generate an interactive relationship with their customers, which helps to strengthen brand loyalty

  • Customers are also able to feedback quickly on products - or to express innovative ideas about how they want the products to be changed 

  • This feedback may help the firm to develop extension strategies in their product life cycle

Sampling

• Sampling involves getting opinions from a selected group of people in order to find out about the market as a whole

  • It is expensive and time-consuming to collect data from all customers in a market

  • Market researchers use carefully designed sampling methods from which conclusions can be drawn about the market as a whole

  • In general, the larger the sample size, the more likely that results from market research activities will reflect the market as a whole

The main sampling methods

Random sampling

• This method makes sure that every member of the population has an equal chance of selection

  • E.g. a survey of members of a gym may be sent to a random selection of customers taken from the membership database

Advantages

• Simple to design and interpret

• As anyone in the population can be asked bias should be avoided

Disadvantages

• As anyone may be selected, the sample may not be representative of the market as a whole

• Researchers need a complete and accurate population listing

Stratified sampling

• This method involves a random selection of participants from subgroups of the population such as age, gender, income level or education groups

  • E.g. a survey of school pupils may be carried out on Year 10 girls only

Advantages

• Focuses on people from the key subgroup (for example, age or region), so the research results are likely to be highly relevant

Disadvantages

• Setting up and running mini‑samples is likely to be more complex to organise than one simple sample

Quota sampling

• This method obtains a representative sample by determining specific proportions of each group of the population upon which to carry out research

  • E.g. a researcher carrying out a survey for a family car manufacturer may look to interview a sample of 25% between the ages of 18-24, 50% between the ages of 25-45 and 25% aged 46 and above

Advantages

• Quick and easy way of obtaining a sample

• It guarantees that hard‑to‑reach groups (such as older teens) appear in the right numbers in survey results

Disadvantages

• 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

The choice of sampling method

• The choice of sampling method will depend upon a wide range of factors

  1. Time available

     • Where little time is available to carry out market research a random sample may be most appropriate as it is usually very quick and straightforward to organise

  2. Knowledge of the target population

     • Where a business has good knowledge of the target population a quota sample should provide a set of research data that lacks bias

  3. Skills of researchers  

     • Where researchers lack experience or expertise in market research a focused stratified sample is likely to provide a useful set of data that can be easily interpreted