Primary Market Research (Cambridge (CIE) O Level Business Studies): Revision Note

Primary market 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

1. 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

2. 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

3. 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

4. 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

5. 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 

Evaluating the use of primary market research

Primary market research is becoming cheaper

• 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 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

Explaining the different sampling methods

1. Quota sampling

• 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+

2. Random sampling

• 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

3. Convenience sampling

• 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

Which sampling method should be used?

• 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