National 5BusinessSQABusiness ManagementRevision NotesManagement of MarketingMarket ResearchTypes of Market Research

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

Exam code: X810 75

Lisa Eades

Written by: Lisa Eades

Reviewed by: Steve Vorster

Updated on

Field research

  • Market research is the collection and analysis of information about customers, competitors and the market to help a business make better decisions

What is field research?

  • Field research - sometimes known as primary research is when a business collects new, first-hand information directly from customers or the public

    • It is carried out to gather current, specific and reliable data that doesn’t already exist

    • For example, a business might ask customers questions about a new product idea or visit competitors to observe their prices and service

  • Businesses use field research to

    • Find out what customers want and need

    • Test new ideas, products or prices before launch

    • Understand customer opinions and behaviour

    • Identify gaps in the market or areas for improvement

Evaluating the use of field research

Advantages

Disadvantages

  • Up to date

    • Information is collected in the present, so it reflects current customer attitudes and trends

  • Specific to the business’s needs

    • Questions can be tailored to find out exactly what the business wants to know

  • Reliable and original

    • As the data is collected first-hand, it is not influenced by other organisations or outdated sources

  • Improves decision-making

    • Provides direct insight from customers, helping the business make informed choices about products, prices or promotions

  • Time-consuming

    • Planning, conducting and analysing research takes time before decisions can be made

  • Expensive

    • Hiring staff, creating surveys, or interviewing customers can be costly compared to using existing data

  • Limited responses

    • Only a small sample of people may take part, meaning results might not represent the wider market

  • Risk of bias

    • Poorly designed questions or researcher influence can affect how people respond, reducing accuracy

Case Study

EcoMove logo with green text. The letter 'M' is creatively shaped like a bicycle, symbolising eco-friendly and sustainable transportation.

EcoMove Electric Bikes is a small Edinburgh-based start-up that designs and sells electric bicycles for city commuters.

In 2023, the business planned to introduce a new folding e-bike aimed at students and office workers who travelled by train or bus.

Before launching the new model, EcoMove’s team carried out field research to understand what customers valued most.

  • They visited busy transport hubs such as Waverley Station and local universities to observe commuting habits and speak directly with potential customers about issues like price, portability and battery life.

  • Staff also attended weekend markets and cycling events to collect opinions and feedback on early prototype designs.

Desk research

  • Desk research, sometimes called secondary research, is when a business uses information that has already been collected by someone else

  • This means analysing existing data, rather than gathering new information directly from customers

  • Businesses use desk research to

    • Understand trends in the market or economy

    • Compare competitors’ performance and pricing

    • Analyse historical data to identify patterns in sales or demand

    • Save time and money when first exploring a new business idea

Evaluating the use of desk research

Advantage

Explanation

  • Quick and inexpensive

    • Information is already available, so it can be gathered and analysed without large costs or long delays

  • Wide range of sources

    • Businesses can access government data, industry reports, and competitor websites to gain a broad view of the market

  • Useful for spotting trends

    • Past data helps identify changes in customer behaviour or market conditions over time

  • Good starting point

    • Desk research helps businesses understand general background information before carrying out more detailed field research

  • May be out of date

    • Older data may not reflect current customer behaviour or economic conditions

  • Not specific to the business’s needs

    • Information collected for another purpose may not answer the exact questions a business has

  • Risk of inaccuracy or bias

    • Some sources may be unreliable or present information in a way that benefits their own organisation

  • Available to competitors

    • Since desk research uses public information, rivals can access and use the same data

Case Study

Logo for Bright Cleaning Services with a sun and broom design, featuring two sparkles. Text is in bold, dark green on a yellow background.

Bright Cleaning Services is a small Glasgow company offering eco-friendly cleaning for offices and private homes. The owner wants to expand by targeting new commercial clients in nearby towns.

Before investing in advertising, Bright’s manager intends to gather existing information from a range of sources, including

  • Local council business directories to find the number of offices and retail units in each area

  • Competitors’ websites to compare prices and service packages

  • Government statistics on local employment and business growth

How do businesses use market research to make decisions?

  • Businesses use research findings to make informed decisions

Decision

Use of research

Example

Product design and development

  • Identifies which features or designs customers prefer

  • A tech company develops a lightweight laptop after customer feedback

Pricing

  • Reveals how much customers are willing to pay and what competitors charge

  • A café adjusts its prices after researching local rivals

Promotion

  • Shows which advertising methods and messages are most effective

  • A clothing brand focuses on social media ads after finding that young shoppers spend more time online

Distribution

  • Indicates where customers prefer to shop — in-store, online or both

  • A bakery starts offering online orders after learning that local customers want home delivery

Customer service

  • Helps identify strengths and weaknesses in customer experience

  • A hotel improves staff training after survey results show complaints about service speed

Evaluation of market research

  • Businesses usually combine field research and desk research to get a complete picture before making decisions

Why market research is valuable

  1. Reduces risk

    • Market research helps businesses avoid costly mistakes by testing ideas before launch

      • For example, checking if there is real demand for a new product before investing heavily in production

  2. Improves decision-making

    • Research provides managers with evidence to base their decisions on, rather than relying on guesswork or assumptions

    • This leads to more confident and accurate business choices

  3. Helps identify customer needs

    • By understanding what customers want and expect, a business can design products and services that meet those needs more effectively, leading to higher satisfaction and loyalty

  4. Supports marketing activities

    • Market research helps identify the best target market, advertising methods, prices, and promotional messages to reach customers successfully and maximise sales

  5. Tracks performance and trends

    • Ongoing research allows businesses to monitor sales levels, customer satisfaction, and changes in market conditions over time, helping them adapt quickly

  6. Gives competitive advantage

    • A business that understands its customers better than competitors can respond faster to changes in demand, stay relevant and build a stronger position in the market

Limitations of market research

Limitation

Explanation

Can be expensive

  • Field research, surveys and focus groups take time and money, especially for small businesses

Information may be inaccurate or biased

  • Poorly designed questions or unreliable secondary sources can lead to misleading conclusions

Findings can become outdated quickly

  • Customer preferences and market conditions can change soon after research is completed

Not all research leads to success

  • Even accurate data cannot guarantee that a new product or marketing campaign will perform well

Risk of over-reliance

  • Some businesses spend too long analysing data instead of acting on opportunities

Examiner Tips and Tricks

Students often forget that field research costs more but gives up-to-date results, while desk research is cheaper but may be outdated

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Author
Reviewer
Lisa Eades

Author: Lisa Eades

Expertise: Business Content Creator

Lisa has taught A Level, GCSE, BTEC and IBDP Business for over 20 years and is a senior Examiner for Edexcel. Lisa has been a successful Head of Department in Kent and has offered private Business tuition to students across the UK. Lisa loves to create imaginative and accessible resources which engage learners and build their passion for the subject.

Steve Vorster

Reviewer: Steve Vorster

Expertise: Economics & Business Subject Lead

Steve has taught A Level, GCSE, IGCSE Business and Economics - as well as IBDP Economics and Business Management. He is an IBDP Examiner and IGCSE textbook author. His students regularly achieve 90-100% in their final exams. Steve has been the Assistant Head of Sixth Form for a school in Devon, and Head of Economics at the world's largest International school in Singapore. He loves to create resources which speed up student learning and are easily accessible by all.