Primary and Secondary Research (Edexcel A-Level Business): Revision Notes
Primary and Secondary Research
What is primary research?
Primary research (also called field research) involves collecting data that did not exist before. This means the business or researcher must gather the information themselves from scratch. Primary research can be conducted by the business itself or by hiring a specialist market research agency.
Because primary research collects brand new information, it tends to be more expensive than secondary research. This is why many small businesses choose to conduct their own primary research rather than paying for external agencies.
Primary research typically involves asking consumers questions or observing their behaviour. In an ideal world, a business would question or observe all consumers of a product (called the population). However, this is usually too expensive or impractical. Instead, businesses survey a sample – a smaller group of people who are representative of the total market.
Methods of primary research
Questionnaires
A questionnaire is a list of written questions designed to record views and opinions from respondents. Good questionnaires should have the following qualities:
Balance of question types:
- Closed questions give respondents a limited range of responses (e.g. "How many times have you flown with Emirates this year?"). These are easier to analyse and present numerically.
- Open questions allow people to say whatever they want without choosing from a list (e.g. "How would you improve the quality of service provided by Emirates?"). These are useful when there are many possible responses.
Key features of effective questionnaires:
- Clear and simple questions that avoid jargon, poor grammar and spelling mistakes
- No leading questions (questions that suggest a certain answer and create bias)
- Not too long (otherwise people won't complete them)
Ways to deliver questionnaires:
| Method | Description | Advantages | Disadvantages |
|---|---|---|---|
| Postal surveys | Sent to people to complete in their own time | More convenient for respondents | Very low response rate – most are never returned, wasting resources |
| Telephone interviews | Questions asked over the phone by interviewer | Cheaper; can cover wide geographical area | Some people dislike being telephoned by businesses |
| Personal interviews | Face-to-face interviews (often on the street) | Questions can be explained if respondent is confused; more detailed information possible | Many people dislike being approached in the street |
Focus groups and consumer panels
When businesses need very detailed information, they may use focus groups or consumer panels.
Focus groups involve inviting a number of customers to attend a discussion led by market researchers. The group must be representative of the whole population and willing to answer detailed questions. This method is relatively cost-effective but the group may be quite small, limiting reliability.
Consumer panels are similar to focus groups but customers provide feedback over a longer period of time. This approach allows businesses to see how consumers react to changes in products over time.
Observation
Observation involves market researchers watching customer behaviour without direct interaction. This method might be used in retail outlets where observers record how long customers spend looking at particular products or displays.
Limitation: Because there is no direct feedback, many questions remain unanswered about why customers behave in certain ways.
Test marketing
Test marketing involves selling a new product in a restricted geographical area before launching it nationally. After a trial period, feedback is gathered from customers and used to make modifications before the final launch.
Benefit: This reduces the risk of product failure by identifying problems early.
What is secondary research?
Secondary research (also called desk research) involves collecting information that already exists. This data may come from inside the business (internal data) or from outside sources (external data).
Secondary research is generally quicker and cheaper than primary research because the data has already been collected by someone else.
Sources of secondary research
Internal data
Internal data comes from existing business documents and records:
- Existing market research reports – previous studies conducted by the business
- Sales figures – particularly useful when broken down by market segments
- Sales force reports – feedback from staff who have direct contact with customers
- Annual reports and accounts – published financial information
- Company intranets – internal networks restricted to employees (some information may also be on public websites)
- Stock movements – often provide the most up-to-date information on demand patterns because they are recorded instantly, unlike sales figures which are collected later
External data
External data comes from sources outside the business. Other individuals or organisations will have collected this data for their own purposes, but businesses can use it for market research:
Government publications:
- Social Trends
- Census of Population
- Annual Abstract of Statistics
- Many are now available online
European Union publications:
- EU provides valuable data for businesses operating in EU countries
- Eurostatistics published by Eurostat (Statistical Office of the European Union)
International publications:
- World Bank reports
- International Monetary Fund publications
- Useful for overseas market information
Commercial publications:
- Specialist organisations gather detailed data about particular markets
- Examples: Mintel, Dun & Bradstreet, Verdict
Retail audits:
Electronic Point of Sale (EPoS) systems make it easier to collect detailed, up-to-the-minute sales data. Retail audits monitor and record sales in a sample of retail outlets, providing continuous monitoring of business performance in the market.
For example, weekly music charts are compiled from sophisticated tracking services across multiple retailers. Charts now include vinyl, CDs, digital downloads, and streaming data.
Other external sources:
- Information from competitors (promotional materials, product specifications, price lists)
- Customer service data on complaints
- General publications (newspapers and magazine articles)
- Internet website pages – increasingly used to search for secondary data
Key differences between primary and secondary research
| Feature | Primary Research | Secondary Research |
|---|---|---|
| Data source | New data collected for the first time | Data already exists |
| Cost | Usually more expensive | Generally cheaper |
| Time | Takes longer to collect | Quicker to access |
| Relevance | Highly specific to business needs | May not perfectly match needs |
| Control | Business has full control over data collection | No control over how data was collected |
| Examples | Questionnaires, focus groups, observation | Government statistics, competitor websites, industry reports |
Exam tips
When analysing primary vs secondary research:
- Consider the context – what does the business need to find out?
- Evaluate cost implications – small businesses may not afford extensive primary research
- Assess time constraints – secondary research is faster but may be less relevant
- Consider the accuracy and relevance of data needed
For evaluation questions:
- Judgement should consider which method is most appropriate given the business's circumstances
- No method is always "best" – it depends on factors like budget, time, and the specific information needed
- Often a combination of both primary and secondary research is most effective
Remember!
Key Points to Remember:
- Primary research collects brand new data that didn't exist before – it's tailored to the business's specific needs but is more expensive and time-consuming
- Secondary research uses data that already exists – it's quicker and cheaper but may not be perfectly suited to the business's requirements
- Key primary methods include questionnaires (postal, telephone, face-to-face), focus groups, observation, and test marketing
- Internal secondary sources include sales figures, stock movements, and existing reports
- External secondary sources include government publications, commercial research organisations, retail audits, and competitor information
- Both types of research have strengths and limitations – businesses often use a combination of both for effective market research