Methods of Market Research (SQA National 5 Business Management): Revision Note

Collects first-hand data

• Information comes directly from customers, making it accurate and relevant to the business’s needs

Can reach a wide audience

• Online and telephone surveys allow businesses to gather opinions from people in different locations quickly

Easy to analyse

• Closed questions produce numerical data that can be turned into graphs or statistics

Flexible format

• Surveys can be short and simple, or detailed and in-depth, depending on what information is needed

Time-consuming to design and collect

• Creating clear questions and gathering enough responses can take a long time

Low response rates

• Many people ignore or delete surveys, especially online or postal ones

Risk of bias

• Poorly worded questions or interviewer influence can lead to inaccurate answers

Limited detail from short surveys

• Closed questions don’t always explain why customers think or act in a certain way

Provides detailed information

• Allows deeper understanding of customer opinions, motivations and behaviour

Immediate feedback

• Researchers can ask follow-up questions to explore answers in more depth

Builds customer relationships

• Participants feel valued when their opinions are sought directly

Useful for testing ideas and products

• Helps identify potential problems before launch

Time-consuming and costly

• Planning, running and analysing discussions take considerable time and resources

Small sample size

• Results may not represent the views of the wider market

Risk of bias

• Interviewers or dominant group members can influence others’ responses

Difficult to analyse

• Open-ended responses can be hard to summarise or quantify.

Reduces risk of failure

• Problems can be identified and fixed before the product is launched widely

Provides direct customer feedback

• Real reactions from target customers show what works and what doesn’t

Improves product quality

• Changes can be made to improve design, taste, packaging or features.

Helps decide on pricing and promotion

• Testing helps gauge how much customers are willing to pay and what advertising appeals most

Can be costly

• Producing prototypes or trial runs adds expense before the product even reaches the full market

Takes time

• Testing delays the full launch, which might allow competitors to act first

Small-scale results may not reflect full market reaction

• What works in one area might not appeal nationally

Customers may expect free samples

• Trial participants might not fully represent customers accurately

Shows real customer behaviour

• Gives an accurate picture of what customers actually do rather than what they claim in surveys

Unobtrusive method

• Customers often act naturally because they are unaware they are being observed

Useful for improving store layout or displays

• Helps identify where to position products for maximum attention

Provides immediate visual data

• Patterns and problems can be spotted quickly and acted upon

Does not explain motives

• Observation shows what people do but not why they do it

Can raise ethical or privacy concerns

• Customers may object to being watched or recorded without consent

Time-consuming

• Requires staff or equipment to observe customers over long periods

Limited sample size

• Only a small number of customers can be observed at one time, so results may not represent all buyers