Primary and Secondary Marketing Research (AQA A-Level Business): Revision Notes
Primary and secondary marketing research
What is market research?
Market research is the systematic process of gathering and analysing information about potential customers. This helps businesses understand who their customers are, what they want, and how they behave. Without proper market research, businesses would be making decisions based on guesswork rather than evidence.
Every business needs to fully understand the market in which it operates. Market research helps businesses with several key tasks:
Key Tasks of Market Research:
- Understanding market trends and customer characteristics
- Analysing market shares and the potential of existing products
- Forecasting future sales for current and new products
- Identifying opportunities and gaps in the market
Market research falls into two main categories: primary research and secondary research. Each type has different methods, costs, and benefits.
Primary research
Primary research (also called field research) means collecting brand-new information for the first time, specifically designed to answer your business questions. This data comes directly from original sources and is tailored to your specific needs.
Methods of primary research
There are four main ways to conduct primary research:
Surveys involve asking people questions through questionnaires. These can be conducted face-to-face, by post, over the telephone, or online. Surveys are useful because they can reach many people relatively quickly and provide direct answers to specific questions.
Observation means watching and recording how people actually behave. This might involve watching customer reactions to shop displays, counting footfall in a particular location, or monitoring how people interact with products. The advantage is that you see real behaviour rather than what people say they do.
Focus groups bring together small groups of consumers to discuss their attitudes and opinions about products, services, or brands. These sessions are usually guided by a moderator and allow for in-depth exploration of consumer views. Focus groups can reveal the 'why' behind consumer choices.
Test marketing involves trying out a product on a small group of consumers before a full-scale launch. This allows businesses to gauge reaction, identify problems, and make improvements before committing to a wider release. It reduces the risk of costly failures.
Advantages and disadvantages
Advantages of Primary Research:
The main advantage of primary research is that it directly addresses your specific business needs. The information is fresh, relevant, and tailored to answer your exact questions.
Disadvantages of Primary Research:
However, primary research often requires significant financial investment and can be time-consuming to conduct properly.
Exam tip: When evaluating research methods, always consider the specific circumstances of the business - budget, time constraints, and the type of information needed.
Secondary research
Secondary research involves gathering information that has already been collected and published by someone else for different purposes. This is sometimes called desk research because it can often be done from your desk using existing sources.
Sources of secondary research
Published reports provide valuable market information. Trade associations and industry journals regularly publish reports containing data on market trends, consumer behaviour, and industry developments. These can offer useful insights into market conditions.
Government and other agencies make vast amounts of information freely available. A key publication is the Annual Abstract of Statistics, which contains data on population, employment, spending patterns, and economic trends. Government statistics are generally reliable and comprehensive.
The internet offers an enormous amount of information about markets and consumer behaviour. Online databases, company websites, news articles, and industry reports can all be accessed quickly and often at no cost.
Advantages and disadvantages
Advantages of Secondary Research:
Secondary research is typically much cheaper and faster than primary research because the data already exists.
Disadvantages of Secondary Research:
However, the information may not perfectly match your needs, could be out of date, or might have been collected using methods you cannot verify.
Qualitative market research
Qualitative market research focuses on understanding the attitudes, opinions, and feelings of consumers that shape their buying decisions. This type of research explores the 'why' and 'how' of consumer behaviour, rather than just counting numbers.
Qualitative research is typically collected from small groups of consumers, such as focus groups. It helps businesses understand consumer reactions to various aspects of their marketing mix:
- Product features and design
- Pricing strategies and perceived value
- Packaging appearance and functionality
- Brand image and positioning
This deeper understanding enables businesses to design products and marketing campaigns that genuinely appeal to their target customers. For example, a focus group might reveal that consumers find packaging difficult to open, or that they associate a particular colour with poor quality.
Quantitative market research
Quantitative market research collects numerical data about consumer views and behaviour that can be measured and analysed using statistics. This research produces data that can be presented in charts, graphs, and tables.
Common types of quantitative data include:
- Current sales figures and potential future sales
- Market size and growth rates
- Prices consumers are prepared to pay
- Market share percentages
- Customer satisfaction scores
Quantitative research provides clear, measurable evidence that can guide business decisions. For instance, if 73% of customers rate a product as 'good' or 'excellent', this gives concrete evidence of customer satisfaction that can be tracked over time.
Market mapping
Market mapping is a visual technique that uses a diagram to show the position of all products in a market based on two key features. These features might be price and quality, but could also be other characteristics like luxury versus economy, or traditional versus innovative.
How market mapping works
To create a market map, businesses identify two important features that matter to customers. These become the two axes of the diagram. Each brand or product in the market is then positioned on the grid according to where it sits on these two dimensions.
Worked Example: UK Supermarket Market Map
In the UK supermarket industry, supermarkets can be mapped using price (low to high) and quality (low to high).
Positioning:
- Waitrose would appear in the high quality, high price quadrant
- Stores like Farmfoods might appear in the low price, low quality area
- Tesco might sit somewhere in the middle, offering moderate prices and quality
Benefits of market mapping
This approach helps businesses identify where competition is most intense and may reveal gaps in the market where few competitors operate. If a market map shows that no brands occupy the 'high quality, low price' position, this might represent a business opportunity - though there may be good reasons why this gap exists (such as the difficulty of maintaining high quality at low prices).
Market mapping also helps businesses understand their competitive position and decide whether to maintain their current position or reposition their brand.
Sampling
Businesses cannot collect information from every single potential customer - this would be far too expensive and time-consuming. Instead, they use sampling, which means selecting a representative group of consumers from a larger population.
The population in research terms refers to the entire group you want to understand. The sample is the smaller group you actually study. The general principle is that larger samples typically produce more reliable findings, but there's always a balance between accuracy and cost.
Types of sampling methods
Random sampling gives each member of the population an equal chance of being selected. This approach is particularly suitable when researching a product aimed at a large, diverse target market. Computer systems are often used to select people randomly from databases. Random sampling helps avoid bias in who gets included.
Stratified random sampling first divides the population into segments (called strata) based on characteristics like age, gender, or location. The sample is then selected to ensure its composition accurately reflects that of the entire population. This approach helps avoid bias by ensuring all groups are properly represented.
Quota sampling divides the population into groups sharing common characteristics. For example, when researching a new product aimed at women, a business might conduct interviews with specific numbers of women in different age categories. This method saves money by limiting the number of respondents while still capturing views from different customer segments.
Exam tip: Remember that no sampling method is perfect. Be prepared to assess the value of different sampling methods based on the particular circumstances of the business and what they're trying to find out.
Key Points to Remember:
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Primary research provides specific, first-hand data but can be expensive, while secondary research uses existing data that's cheaper but may not perfectly fit your needs
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Qualitative research explores consumer attitudes and opinions (the 'why'), whilst quantitative research provides numerical data that can be statistically analysed (the 'how much')
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Market mapping helps businesses visualise their competitive position and identify potential gaps in the market
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Sampling makes market research practical and affordable by studying representative groups rather than entire populations
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The choice between research methods depends on the business's budget, timeline, and the specific information they need to gather