Primary Market Research Explained | Surveys, Focus Groups, Observations, and Test Marketing
Summary
TLDRThis 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
📊 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.
📋 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.
🔍 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.
Mindmap
Keywords
💡Primary market research
💡First-hand insights
💡Surveys and Questionnaires
💡Focus Groups
💡Interviews
💡Observations
💡Test Marketing
💡Quantitative and Qualitative Data
💡Competitive Edge
💡Research Bias
💡Participation
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.
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