Methods of market research
Market research can use primary or secondary data sources.
Primary research — Data collected by a firm in real time.
Secondary research — Data collected through research of past sources.
Primary research methods
Interviews
| Advantages | Disadvantages |
|---|
| Immediate feedback | Expensive |
| Is specific to the business | The sample size is often small |
| Detailed responses with elaborations can be collected | |
Questionnaires
| Advantages | Disadvantages |
|---|
| Cheaper | Questions must be very clear |
| The sample size is often large | Responses are not detailed |
| It is very quick to conduct | |
Observations
| Advantages | Disadvantages |
|---|
| Cheap and quick | May not be as useful |
| A large sample can be collected due to the simplicity of this method | Does not have worded input, so not as detailed |
Focus groups
| Advantages | Disadvantages |
|---|
| Detailed responses can be collected | Expensive |
| The research is highly specific to the business | One person may dominate the discussion |
| Immediate feedback | Opinions of the sample may be influenced/biased |
| It is cheaper than individual interviews | The sample may not be an accurate representation of the target market |
Secondary research sources
Common secondary sources include:
- Government publications
- Newspapers
- The internet
| Advantages | Disadvantages |
|---|
| It is often reliable | May be out of date |
| Sample size used is often large | May not be specific to the business |
| Not expensive | The data can also be accessed by competitors |
| Quick | |
Market vs product orientation
- Market oriented business — a business that produces goods/services based on customer demand and needs.
- Product oriented business — a business that focuses on the production of a good/service before testing for demand.
Factors influencing the accuracy of market research data
- The size of sample used
- The age of the data used
- The people being used as a sample
- The clarity of the question
- The anonymity of the method