Market research gathers information about consumers, competitors and the market environment. Businesses use this data to reduce risk in decision making, identify opportunities and design products and marketing strategies that meet customer needs.
Primary and secondary research
There are two main types of market research:
- Primary (field) research – collecting new data directly from potential customers. Methods include:
- Questionnaires and surveys – structured questions asked in person, by phone or online.
- Interviews – in‑depth, face‑to‑face discussions providing qualitative insights.
- Focus groups – guided group discussions exploring consumers’ attitudes.
- Observations and experiments – watching customer behaviour or testing products.
- Secondary (desk) research – using data that already exists. Sources include:
- Internal records – sales data, customer databases and financial records.
- External sources – government statistics, trade journals, market reports and internet research.
Primary research is specific and up‑to‑date but can be expensive and time‑consuming. Secondary research is cheaper but may be outdated or not perfectly matched to the firm’s needs.
Advantages and disadvantages of primary research methods
Questionnaires and surveys:
- Advantages: Gather quantitative data from many people quickly; easy to analyse; relatively inexpensive online.
- Disadvantages: May have low response rates; poorly designed questions produce unreliable data; no opportunity to probe answers.
Interviews:
- Advantages: Allow in‑depth discussion and clarification of responses; higher response rates than surveys.
- Disadvantages: Time‑consuming and costly; interviewer bias can influence answers; small sample sizes.
Focus groups:
- Advantages: Encourage participants to share ideas and opinions; provide rich qualitative insights; useful for product testing.
- Disadvantages: Expensive to organise; dominant individuals may steer the conversation; results are not statistically representative.
Observations and experiments:
- Advantages: Record actual consumer behaviour rather than reported opinions; can test reactions in real situations.
- Disadvantages: Can be costly and time‑intensive; may raise ethical issues if customers are unaware; difficult to determine motives behind actions.
| Type of research | Examples | Advantages | Disadvantages |
|---|---|---|---|
| Primary (field) | Surveys, interviews, focus groups, observations. | Specific to business needs; current data; control over collection. | Costly; time‑consuming; potential bias if sample is not representative. |
| Secondary (desk) | Company records, government statistics, internet research, trade journals. | Quick and inexpensive; readily available. | May be outdated; not tailored to specific questions; reliability may be uncertain. |
Sampling methods compared
| Method | Description | Benefits | Limitations |
|---|---|---|---|
| Random sampling | Every individual in the population has an equal chance of being selected. | Simple; unbiased if conducted correctly. | May not reflect important subgroups; requires a complete list of population. |
| Quota sampling | Population is segmented, and a set number from each segment is selected non‑randomly. | Ensures representation of key groups; quicker and cheaper than random sampling. | Potentially biased as selection within segments is not random. |
| Stratified sampling | Population is divided into strata; random samples taken from each stratum in proportion to the population. | Combines accuracy of random sampling with representation of key groups. | More complex; requires detailed population data. |
Sampling methods
Because it is impractical to question every potential customer, researchers survey a sample. Common methods include:
- Random sampling – selecting individuals purely by chance; every person has an equal chance of being chosen.
- Quota sampling – dividing the population into groups (e.g. by age or gender) and sampling a predetermined number from each group.
- Stratified sampling – selecting a random sample from each segment in proportion to the population.
Sample size and bias affect the reliability of results. Larger samples are more accurate but cost more.
Analysing and presenting data
Once collected, data must be analysed and presented. Quantitative data can be summarised using statistics and displayed as tables, charts and graphs. Qualitative data from interviews and focus groups should be interpreted to identify themes and insights. Accurate analysis helps businesses make evidence‑based decisions.
Examples and applications
A start‑up bakery planning to introduce a new cake flavour might hand out free samples and ask customers to fill in a short questionnaire about taste, price and preferred packaging. This primary research provides up‑to‑date feedback directly from potential buyers. In contrast, a large electronics company launching a new smartphone will analyse existing secondary data such as industry sales reports, competitor product specifications and consumer trend surveys to identify gaps in the market before designing its own product.
Sampling methods also vary with the objective. A school cafeteria seeking feedback on menu options could use quota sampling by surveying a set number of students from each year group to ensure representation. Market research agencies often use random sampling telephone surveys to gather opinions from a broad cross section of the population. Online stores sometimes use stratified sampling, inviting existing customers from different regions or spending levels to test a new website design.
