Market Research Methods
How a business finds out what customers want: why it researches, primary against secondary methods, qualitative against quantitative data, and how to pick the right method for the budget, product and timescale.
Use it, the way the marks are given
Free interactive practice at using the material, which is what the marks are for.
Start revising freeWhat you'll cover
Finding out what customers want
Before a business spends money on a product, it wants to know it will sell. Market research is how a firm gathers information about its customers, its competitors and its market. It helps a business spot new opportunities and understand what people really want. There are two sources. Primary research is new information the business collects itself, through questionnaires, surveys, interviews and focus groups. Secondary research uses information that already exists, such as internet data and the printed press. Research also splits by the kind of answer it gives. Qualitative research gathers opinions and reasons, while quantitative research gathers numbers that are easy to compare. This module covers the methods and how to choose between them.
Research words
Learn these before you match any method, and notice which source the business collects for itself.
Qualitative against quantitative
Research gives two different kinds of answer, and each suits a different question.
How to pick a research method
Do not just name the methods. Fit one to the firm asking. Weigh three things: how much money it can spend, what the product is, and how fast it needs an answer. A small budget and a quick deadline point to cheap existing sources. A need to understand why customers feel something points to talking with them directly. Say which method suits this business and why the other would fit worse.
Match the method to what it is
- a questionnaire
- a focus group
- internet research
- an interview
- asking a set list of questions to many people
- a small group discussing their views in depth
- using data others have already published online
- a one-to-one conversation to explore opinions
Primary or secondary?
A firm reads an industry report published last year by a research company to learn about its market. Which type of research is this?
- Secondary research, using data that already exists.
- Primary research, collected first hand.
- A focus group.
- A survey it carried out.
Why do market research
Select the TWO real reasons a business carries out market research.
- To spot new market opportunities
- To understand customers and competitors better
- To guarantee the product will always make a profit
- To avoid ever having to make a product
Survey non-responders
A business sends a survey to 500 customers, and 350 of them reply. Subtract to find how many customers did not reply.
Order a research project
Put the steps of a market research project in order, earliest first.
- Decide what the business needs to find out
- Choose a suitable research method
- Collect the data from customers or sources
- Use the findings to make a decision
Complete the facts
Gathering information about customers and competitors is market _____. New information a business collects itself is _____ research. Information that already exists and was gathered by others is _____ research. Research into opinions and reasons rather than numbers is _____ research.
Match the method to a benefit or drawback
- using primary research
- using secondary research
- running a focus group
- running a large survey
- fresh and specific to the firm but costly to gather
- quick and cheap but may be out of date
- deep opinions but only from a few people
- lots of numbers that are easy to compare
Spot the true research facts
Tap the TWO statements that are true about market research.
- Primary research is collected first hand by the business
- Qualitative research gathers opinions and reasons
- Secondary research is always collected first hand
- Market research guarantees a product will sell
Choose the research
Read each case and choose the best method, with a reason.
- A tiny start-up with almost no money needs a quick picture of its market. Which method fits best?
- A firm wants to understand exactly why customers dislike its new packaging. Which method fits best?
- A student names a method but never says why it suits the business. How could the answer be improved?
Recommend a research method
A small bakery with a limited budget wants to launch a new cake and needs to know if local customers would buy it. Recommend how it should research the market.
- Explain why the bakery should do market research first
- Explain the difference between primary and secondary research
- Recommend a suitable method for this bakery
- Justify your choice using its budget, product and timescale
- Finish with a judgement on how the research would lower the risk of the launch