Primary Market Research Explained | Surveys, Focus Groups, Observations, and Test Marketing

Summary

This script outlines primary market research methods, including surveys, focus groups, interviews, observations, and test marketing, which help businesses gain insights to inform decisions and grow. It highlights the benefits of tailored, up-to-date data and the competitive edge it provides, while also discussing the challenges of cost, potential bias, and engaging participants.

Takeaways

• 🔍 Primary market research is crucial for businesses to gather first-hand insights and information not readily available.
• 📊 It can be conducted by the business itself or by external agencies and includes methods like surveys, focus groups, interviews, observations, and test marketing.
• 📋 A questionnaire is a set of written questions, often a mix of open and closed-ended, while a survey encompasses the process of collecting and analyzing responses.
• 📈 Surveys are versatile and can be conducted online, via postal mail, or in person, and are popular for quickly gathering customer feedback.
• 🗣️ Focus groups and one-on-one interviews provide deeper insights but involve more time and resources compared to questionnaires.
• 👥 The size of focus groups and interview participants can significantly impact the representativeness and reliability of the findings.
• 👀 Observations of customer behavior in real-time settings offer genuine insights but can be subjective and may leave questions unanswered.
• 🏪 Test marketing allows businesses to trial products in smaller areas before a full-scale launch, reducing risk and gaining valuable feedback.
• 📈 Primary research is beneficial as it is tailored to the business's needs, providing specific, up-to-date, and competitive insights.
• 💸 However, primary market research can be expensive, time-consuming, and may suffer from biases if the sample is not representative of the target market.

Q & A

What is the primary purpose of primary market research?

The primary purpose of primary market research is to gain first-hand insights and information about the market in which a business operates, which is not already available, to support decision-making and business growth.

Who typically conducts primary market research?

Primary market research is usually conducted by the business itself or by external parties such as a specialist market research agency on behalf of the business.

What are the common methods used in primary market research?

Common methods include surveys and questionnaires, focus groups and interviews, observations, and test marketing.

What is the difference between a survey and a questionnaire?

A questionnaire is a written set of questions, often with a mix of open and closed questions. A survey, on the other hand, is the process of collecting and analyzing responses from these questions, looking for trends and behaviors.

Why are surveys popular among businesses?

Surveys are popular because they offer a convenient and cost-effective way to gather feedback from a large population in a short timeframe.

What is the potential downside of conducting surveys?

The downside of surveys is that they may lack depth, and participants might not take them seriously, which can affect the quality of the data collected.

How can focus groups and one-to-one interviews provide more in-depth information?

Focus groups and one-to-one interviews allow for more in-depth information because they involve direct interaction with a select group of people or individuals, providing more thoughtful answers and opportunities to expand on key points.

What is an example of how primary market research influenced a business decision?

Chrysler Plymouth used focus group findings to discover that wives, not husbands, were choosing more sensible car models over their convertibles. This led them to adapt their advertising strategy to target women, resulting in increased sales.

How does observing customer behavior provide insights to businesses?

Observing customer behavior allows businesses to understand the customer experience and what influences their decisions, which can help improve the store layout, promotions, and ultimately influence customer behavior positively.

What is test marketing and why is it used?

Test marketing is the process of trialing products in smaller geographical areas to gain feedback from the target market before a larger launch. It helps reduce risk and gain insights to improve the product and marketing mix.

What are some benefits of conducting primary market research?

Benefits include obtaining specific and up-to-date findings relevant to the business, having flexibility in conducting research, and gaining a competitive edge by having exclusive access to the data.

What are some drawbacks of conducting primary market research?

Drawbacks include the potential for high costs, time-consuming processes, risk of research bias, and difficulty in attracting serious participation from customers.

Outlines

00:00

📊 Introduction to Primary Market Research

This paragraph introduces primary market research as a tool for businesses to collect firsthand insights and information about their market. It explains that primary research is typically conducted by the business itself or by external agencies and can include various methods such as surveys, questionnaires, focus groups, interviews, observations, and test marketing. The paragraph emphasizes that primary research is new and involves data collection not previously available, serving purposes like identifying customer needs, market gaps, and reducing business risks. It also clarifies the difference between surveys and questionnaires, with surveys being a more comprehensive process that includes question collection and analysis.

05:01

📋 Surveys and Questionnaires in Detail

The second paragraph delves into the specifics of surveys and questionnaires. It describes surveys as convenient and cost-effective methods for gathering feedback from a large population, which can be conducted online, via postal mail, or in person. The paragraph also discusses the challenges of survey length and the importance of engaging participants. Examples are given, such as Sky using text message surveys and Argos collecting customer thoughts via email. The paragraph transitions into discussing focus groups and one-to-one interviews as methods for obtaining more in-depth information, with a focus on the formal nature and thoughtfulness of participants' responses.

10:02

🔍 Observations and Test Marketing

The third paragraph discusses the use of observations to gain insights into customer behavior and experience, highlighting how businesses can identify patterns and make strategic decisions based on these observations. It also introduces test marketing as a way to trial products in smaller areas to gather feedback and reduce launch risks. The paragraph provides an example of a small ice cream brand testing its products in supermarkets and the importance of considering the product, price, distribution, and promotional effectiveness during test marketing. It concludes by pointing out the benefits and potential drawbacks of test marketing, such as cost, time consumption, and the risk of results not representing the entire target market.

🏆 Benefits and Drawbacks of Primary Market Research

The final paragraph summarizes the benefits and drawbacks of conducting primary market research. It highlights the specificity, relevance, timeliness, and competitive edge that primary research offers. However, it also acknowledges the potential high costs, time consumption, research bias, and difficulty in attracting serious participation from customers. The paragraph ends with a call to action for viewers to explore more about market research on the YouTube channel and thanks them for their attention.

Keywords

💡Primary market research

Primary market research refers to the process of collecting original data directly from respondents, such as customers or potential consumers, to gain insights about a specific market. In the context of the video, it is crucial for businesses to understand their market and make informed decisions. The script mentions various methods businesses use for primary market research, such as surveys, focus groups, and test marketing.

💡First-hand insights

First-hand insights are direct observations or information gathered by someone who has experienced or participated in an event or situation. In the video script, first-hand insights are emphasized as valuable because they provide businesses with original, unfiltered information about their target market, which is not already available, aiding in decision-making and business growth.

💡Surveys and Questionnaires

Surveys and questionnaires are tools used in market research to collect data from a large number of respondents. A survey encompasses the process of gathering and analyzing responses, while a questionnaire is the set of questions used to gather information. The video explains the difference between the two and how they are used to understand customer needs and behaviors, such as through online platforms or in-person interviews.

💡Focus Groups

A focus group is a form of qualitative research in which a group of people is guided by a moderator to discuss a specific topic, in this case, related to the business's products or services. The video script describes focus groups as a method to gather in-depth information from a select group of individuals who are part of the business's target market or existing customers.

💡Interviews

Interviews, particularly one-to-one interviews, are a method of primary market research where a single respondent is questioned in depth about their opinions, experiences, and behaviors. The video script mentions that interviews can provide more detailed insights compared to standalone questionnaires and are often conducted with customers or target market members.

💡Observations

Observations in market research involve watching and recording customer behavior without directly interacting with them. The video script explains that businesses can use observations to identify patterns and trends in customer behavior, such as how they navigate a store or respond to promotions, to improve the customer experience and influence future behavior.

💡Test Marketing

Test marketing is the process of launching a product in a small, controlled market to gauge customer response and gather feedback before a full-scale launch. The video script uses the example of a supermarket testing a new ice cream brand in a few stores to illustrate how businesses can use test marketing to reduce risk and gain valuable insights before committing to a wider release.

💡Quantitative and Qualitative Data

Quantitative data is numerical and can be statistically analyzed, while qualitative data is non-numerical and provides deeper insights into attitudes, opinions, and behaviors. The video script highlights the importance of businesses designing research that includes both types of data to make more informed decisions, as qualitative data offers depth and context that quantitative data alone cannot provide.

💡Competitive Edge

A competitive edge refers to the advantage a business has over its competitors, often due to unique offerings, strategies, or knowledge. In the context of the video, conducting primary market research can provide a business with exclusive data that competitors do not have access to, potentially giving them a strategic advantage in the market.

💡Research Bias

Research bias occurs when the collection or interpretation of research data is influenced by the expectations or prejudices of the researcher. The video script cautions that businesses must be aware of potential biases in their market research, as the samples chosen may not accurately represent the target market, which can lead to incorrect business decisions.

💡Participation

Participation in market research refers to the act of consumers or other respondents engaging in the research process, such as completing surveys or participating in focus groups. The video script notes the challenge of attracting customers to participate in market research and ensuring that they take the process seriously to provide accurate and useful data.

Highlights

Primary market research helps businesses gain first-hand insights and information not already available about the market.

Primary market research supports decision-making and business growth.

Primary research can be conducted by the business itself or by external agencies.

Common methods include surveys, focus groups, interviews, observations, and test marketing.

Primary research is brand new and involves collection of new data and information.

Surveys and questionnaires are distinct; surveys include the analysis process.

Surveys are popular for gathering feedback quickly but may lack depth.

Focus groups and interviews provide more in-depth information.

Observation of customer behavior can reveal patterns and influence future strategies.

Test marketing allows businesses to trial products and gain feedback before a full launch.

Primary research is tailored to the business's specific needs and aims.

It provides up-to-date and relevant data, with a mix of quantitative and qualitative information.

Primary research gives businesses a competitive edge as competitors cannot access the data.

Conducting primary research can be expensive and time-consuming.

There is a risk of research bias if the sample is not representative of the target market.

Attracting participants to engage in market research can be challenging.

Primary market research findings can significantly impact business strategies and operations.

Transcripts

Primary market research supports businesses  to gain first-hand insights and information  

which isn’t already available about the market  which they operate within to support decision  

making and the growth of the business. This video explores the common methods  

of primary market research which are used by  businesses to collect first-hand insights and  

information from customers and the target market, finishing with a comparison of the key benefits  

versus drawbacks of primary  market research in business. 

Primary market research is typically designed  and conducted by the business itself. 

However, it can also be  conducted by external parties  

such as a specialist market research agency  on behalf of the business if they choose too. 

There is a variety of methods available  to use when conducting primary research  

to ensure the research provides results  which are specific to its own circumstances. 

The common primary market research methods  usually target the business’ customers  

or target market and include: Surveys and Questionnaires, Focus Groups  

and Interviews, Observations, and Test Marketing. Essentially, primary research is brand new  

research which involves the collection of new data  and information that isn’t already available for  

the business and usually conducted for a number  of purposes including: identify customer needs,  

identify gaps in the market, reduce risk,  and ultimately make better decisions. 

Often people use the terms survey and  questionnaire interchangeably but there  

is a difference between them, and it is vitally  important for businesses to understand these  

differences before conducting market research. A questionnaire is any written set of questions,  

typically researchers will use a  mixture of open and closed questions  

aimed at collecting information about individuals. Whereas a survey is not only a set of questions  

but also the process of collecting and analysing  the responses from the questions, looking for  

trends, behaviours, and the bigger picture. Put simply a questionnaire forms the foundations  

and a survey is the whole process including  the method used and analysis of the findings. 

Surveys come in a variety of formats  and typically offer a convenient  

and cost-effective solution for businesses where  a response is required from a larger population. 

Often, they contain a series of  pre-written questions and are commonly  

used online via third party platforms such as  Survey Monkey, Google Forms, and Typeform etc. 

However, surveys can also be paper  based and sent out in the post,  

which is known as a postal survey. Alternatively, they can also be conducted in  

person as part of an interview or focus group with  the aim of collecting the opinions of participants  

which are usually customers or members  of the business’ target market. 

You may have witnessed first-hand surveys  being conducted via interviews as you walk  

down the high street or shopping centre, where  members of the business stop members of the  

public and ask them to complete the survey. They are often short in length but getting  

the balance right through the number  of questions is difficult to judge. 

If the survey is too long, participants  may not finish or will rush the survey,  

alternatively if the survey is too short it may  not provide the business with sufficient data. 

Surveys are an extremely popular way for  businesses to gather vast amounts of feedback  

about their customers experience and  views of their products in a short  

timeframe but often lack depth. As it’s difficult to engaged participants  

and they may not take it seriously. Sky are a good example of a  

business using the survey method. After a phone call with a member of  

the customer service team at Sky, customers will  be surveyed through a series of text messages  

asking them about their experience  and how it could be improved. 

Businesses such as Argos also use surveys to  collect customers thoughts on their purchase  

through an email campaign which is typically  sent a week after purchasing the product.

Focus groups and one to one interviews  

are often used to collate more in-depth  information than a business would typically  

receive from a standalone questionnaire. A focus group is essentially an interview with  

a select group of people, whereas a one-to-one  interview is with just one selected person,  

the participants of both methods would typically  be members of the business’ target market  

or customers of the business already. Some businesses choose to run this process on a  

regular basis, which could be monthly or quarterly  etc. allowing them to track trends and any changes  

to the wants and needs of its target market. Businesses also have the choice who participates  

in the process, it may recruit participants to  take part in the research process on numerous  

occasions, or it may vary participants each time  depending on what the aims of the research are. 

Either way, both have a more formal feel to  them, within which participants have chosen  

to participate either on a voluntary  basis or because they have been paid. 

Therefore, the process is typically taken more  seriously by the participants who provide more  

thoughtful answers and often provides the  researcher with the naturally opportunity to  

expand on any key points and ask further questions  if it would benefit the research findings.

Conducting primary research via  focus groups or one to one interview  

often results in fewer participants in comparison  to sending out a questionnaire electronically and  

the busines often must invest more time and money  into the process for a smaller range of results. 

Whilst the response given by participants are  often more accurate due to the formal approach,  

the size of the focus group or amount of people  who take part in one-to-one interviews can really  

impact how representative the findings are. For example, if a focus group is too small,  

not enough information will be  collected to be representative  

of the target market’s population but too many  participants may cause some participants to not  

get involved or have the chance to contribute. A famous example of focus groups being used as  

part of the primary market research process  and influencing change is Chrysler Plymouth. 

Back in the 1950s, successful car manufacturer  Chrysler Plymouth was struggling with sales of  

its convertible until the findings of focus  group indicated that it was in fact wives  

and not husbands who were choosing more  sensible models over its convertible range. 

This ultimately led Plymouth Chrysler to adapt its  advertising strategy to target women specifically,  

something it hadn’t done before. This resulted in increased sales  

for the business and influenced the car industry  as a whole with competitors soon following suit. 

Observing the behaviour  

of customers provides businesses with genuine  insights into the experience of customers when  

interacting with a business and what influences  them in both a positive and negative manner. 

When observing it is very common for business to  try and spot patterns and trends between customers  

and generate reasoning behind their behaviour to  influence them in the future on a wider scale. 

This could be as simple as a general observation  of a customer’s journey whilst in store  

from the moment they walk into which isles they  go down, how long they stay on each isle for,  

what attracts their attention,  and ultimately what they purchase. 

Even having information which many people would  potentially consider minor about customers such  

as: the path the typical customer takes around the  store, and the impact of different promotions, or  

product placements on their buying behaviour etc. A business is able to use this information to  

firstly improve their experience by making  changes to the store layout and promotions  

used etc. to ultimately influence their  behaviour in a positive manner with the  

aim of increasing spending and their happiness  and willingness to spend with the business. 

However, it is important to understand that  the findings of observations can be subjective  

and often leaves many questions unanswered  

as a result.

Many businesses utilise test  marketing to trial their products,  

reduce the risk, and gain feedback from the target  market before launching it on a larger scale. 

Typically, test marketing is conducted in  smaller geographical areas where the business  

is based or its target market can be reached. Test marketing is very common in industries  

such as food retail, especially for  products which are new to the market  

and not very well known by the target market. Let’s imagine a small independent ice cream  

brand approaches a supermarket to sell  its range of low calorie vegan ice creams,  

if the supermarket’s buyers believe the product  could sell and be popular with its customers,  

it is likely that they will initially purchase  a small quantity of the product and trial the  

product in a small selection of its stores to gain  as much information as possible before committing  

to an increased order and a nationwide launch. During test marketing, aswell as sales data,  

the supermarket would usually be looking for  marketing mix information by focusing on the  

product itself and how it meets the wants and  needs of the target market, the selling price and  

whether customers are willing to pay this amount,  how appropriate the distribution channels are, and  

how effective promotional material and marketing  activities have been to influence buyer behaviour. 

By conducting test marketing, businesses often  receive a number of key benefits which include  

gaining real data and insights as the research  is based on actual customers rather than just  

potential customers who participate in a  survey. Which, in turn helps to reduce the  

risk of a nationwide launch failing as the  business can utilise the research findings  

and feedback from customers to amend the product  and any related elements of the marketing mix  

prior to the nationwide launch. As the product is launched,  

albeit in just a few locations it can really  help to create hype around the product,  

especially if it is popular with the initial  customers who purchased during test marketing. 

However, it’s important to be aware of  the potential drawbacks of test marketing. 

Not only can test marketing be an expensive  and time-consuming method of primary  

research, but the results may also not truly  represent the target market of the business  

which can influence the business to make  decisions based on the customers who were involved  

rather than the target market as a whole. 

So now we have looked at some of the  common primary market research methods,  

lets quickly explore the benefits and drawbacks  of a business conducting primary market research. 

A key benefit of primary research is that  it is designed and conducted by the business  

or on behalf of the business to  meet its requirements and aims,  

therefore the findings are  specific to the business. 

Primary market research is also relevant, up to  date, and the business has the flexibility to  

conduct research when it is required which is so  important in today’s fast paced business world,  

where research which is a couple of years old  could be completely outdated and inaccurate. 

The business can also design the research  to contain a mixture of quantitative and  

qualitative data which in turn makes the research  more useful and reliable to make decisions from 

Also, competitors have no access to the  data, giving the business a competitive edge. 

Whilst some methods can be quick, easy, and  relatively cheap to conduct and analyse,  

primary market research is generally expensive  as the business either has to either train  

and pay existing staff to complete the  process or can outsource the work which  

in turn means they will pay a premium. Either way, primary research can be a  

very time-consuming process dependent on the  methods chosen and results aren’t instant. 

Which can be frustrating and  delay progress in the business  

such as a delayed product launch until the results  are analyse and informed decisions can be made. 

There is also the risk of research bias as the  participants and research samples chosen by the  

business may not be representative of the  population of its target market accurately. 

And finally, It’s very important to note  that it is difficult for most businesses  

to attract customers to participate in the  market research process and when they do,  

there is a risk that they may not take it  seriously which results in accurate findings. 

So that’s it, primary market research explained. 

If you want to find out more about  the purpose of market research or  

secondary market research methods etc. just head over to our YouTube channel  

and watch our videos where we go into depth  and provide examples of these in action. 

Thankyou for listening, I hope that’s helped  you to understand primary market research. 

If you’ve found it useful, don’t forget to  give the video a thumbs up and subscribe  

to Two Teachers YouTube channel for  lots more Business Studies videos.