Why businesses do market research
- To find out what customers need and want, spot gaps in the market, understand competitors, reduce the risk of poor decisions, and inform choices about product design and pricing.
Primary and secondary research
- Primary (field) research collects new data directly, through surveys, questionnaires, interviews, focus groups, observation and product trials. It is up to date and specific, but expensive and slow.
- Secondary (desk) research uses data already collected by others, such as the internet, government statistics, market reports, newspapers and competitors' websites. It is cheap and quick, but may be out of date or not specific enough.
Qualitative and quantitative data
- Quantitative data is numerical, such as '60% of customers prefer…'. Qualitative data is about opinions and reasons, such as why customers like a product.
Sampling and reliability
- A sample is a group chosen to represent the target market. Larger, well-chosen samples give more reliable results; biased samples give misleading results.
- Businesses also use online data, such as customer reviews, social media and website analytics.
Key terms
- Market research
- Gathering information about customers, competitors and the market.
- Primary research
- Collecting new data directly, such as through surveys.
- Secondary research
- Using data that has already been collected by others.
- Qualitative data
- Data about opinions, feelings and reasons.
- Quantitative data
- Numerical data.
- Focus group
- A small group of people who discuss a product in depth.
- Sample
- A group of people chosen to represent the target market.
- Target market
- The group of customers a business aims to sell to.
- Bias
- When results are distorted, so they don't fairly represent the market.