Market Research and its Techniques
I. Primary
Market Research
Primary market research is a kind of market research, which is
done by the business or company itself with the objective of gathering
information that can be used to improve the products, services, and its functions.
Primary market research is also known as field research since it is research
done from scratch, without using any information that is already made available
through other sources. One can gather primary data or information through
qualitative research methods and/or quantitative research methods. Primary
market research is the most common type of a market research method and is also
the most valuable too. It is a method that only answers specific questions and
not irrelevant issues. One can also say that this research is being done in the
subject of enquiry by collecting primary data from the sampling frame.
The following are the five Primary market research techniques that
are most commonly used and applied are quantitative research and qualitative
research.
a) Quantitative
research is a kind of market
research work that is based on hard facts and statistical data rather than the
feelings and opinions of the customers or consumers. This type of research can
prove useful both in terms of primary market research and secondary market
research too. Some of the common examples of quantitative research include exit
surveys, questionnaires, on-site fieldwork and the shopping bag survey. In
fact, another example of quantitative research includes researching of the
previously existing financial reports, research papers. This type of research
comes out with a wide range of statistics and helps to find out the size of the
market as well.
Means used are the following broad
three in case of Quantitative Research.
1. Surveys through
questionnaires: Another superb
and highly effective way to conduct primary market research is through surveys
and questionnaires. The term ‘surveys’ is a broad term that covers a lot of
things such as survey questionnaires, survey forms, survey interviews and
customer satisfaction cards, etc. One of the most common examples of this
research method is the feedback form given by the customers at the time of billing
at a restaurant. It is a straightforward method of knowing whether or not the
customer is satisfied with the business’s existing services and products or
what kind of changes would the consumer like to see. Surveys are also conducted
in the form of web questionnaires these days that enable businesses to collect
a lot of feedback and then analyze it for further use in future.
2. Observation Method:
There are two major observation
techniques or research methods used in primary market research, and they are
observation through interaction and communication with the subject and
observation through no interaction and communication with the subject. This
form of research method comes under the quantitative primary research since
through it; researchers evaluate or measure the behavior of the respondents or
the users in general. This is more of a personal approach in comparison to
surveys and questionnaires, etc. and
thus may have some subjectivity.
3. Trials and
experimentation: This
method of primary research involves scientific tests where hypotheses and
variables, etc. are used. This is a quantitative type of market research, which
may either be controlled out in the field or within controlled environments. In
order to understand this form of research, here is an example that you can
refer to: A food product company created 3 different food packaging styles and
then sold the products to different consumers. After a limited period of time,
it analyzed the sales and came to a conclusion about the preferred packaging
style or design.
b) Qualitative
research: Qualitative
research or qualitative market research is a kind of a research method, which
mainly takes into account the opinions, and feelings of a customer as far as a
business’s products and services are concerned. This type of research tries to
get behind the customer’s mind to fathom what they see lacking or whether they
truly like the product or not. Some common examples of qualitative research
work include doing face-to-face interviews, being part of focus groups.
4. Focus groups: One of the main ways used to conduct primary market research
is through focus groups. This method involves getting a group of people in a
room or a place and asking them insightful questions regarding the product, its
development, their preferences, and feedback, etc. These types of focus groups
can be run or conducted at any location feasible for the company or business.
These days, with advancements in technology and the Internet, it is possible to
conduct them virtually as well, through the method of video conferencing. But
the main thing here is that the group of people brought together have something
in common, for example, either they should belong to the same age group, the
same gender and so on. This division of the group or the selection process must
depend on the audience targeted or the product of service of the company.
Participants in such focus groups may be compensated by either free coupons,
vouchers, gifts or money, etc. Focus groups fall under the qualitative research
method and help businesses know a lot about customer or market trends.
5. In-depth
Interviews: One
may think of an in-depth interview to be a quantitative approach to primary
market research, but this method, in fact, is a qualitative research that takes
into consideration the kinds of choices and preferences a customer base has.
Interviews, unlike focus groups, involve interaction between one moderator and
one respondent and several types of modes and methods may be used to conduct
them. Interviews may not always be restricted to a set pattern of questions but
can also be in the form of a conversation with the target customer base or
audience. This kind of a research method helps to dig further into what the
customer wants, and the answers can later be analyzed to come to a conclusion
for the final product delivery.
II. Secondary Market Research
Secondary market research is
mainly based on collecting information from different sources and then coming
to a conclusion after due analysis. As opposed to primary market research it is
a research technique that does not aim to gather information from scratch but
relies on already available information from one or multiple sources. This
research focuses on data or information that was collected by other people and
is available for either free or paid use for others. Secondary market research
takes into account many different sources for collection of information
including government data, office data, newspapers, magazines, the internet,
etc. One of the benefits of doing secondary market research is that it is
mostly free and takes a lot less time.
The following are the two main
types of Sources of Secondary market research data.
Internal Sources: These sources are those kinds of secondary market research
sources that already exist and are collected in the business’s database or file
system. Internal sources include information that has already been collected by
the company and proves useful for future projects. For most businesses, internal sources may
prove enough to develop new products and services, and this may not require
them to look outside.
Examples:
ü Balance sheets – Previous balance sheets of the business can be referred to
in order to find statistics and figures that may prove useful for evaluation.
ü Profit and loss statements – Profit and loss statements can be consulted to find out
what kinds of products and services resulted in profits previously.
ü Inventory records – This is another piece of data, which can be used as a
source for secondary market research and puts into focus many numbers and
figures.
ü Sales figures – Companies store their previous sales figures so that the
same could be analyzed and used for further research.
External Sources: In case the internal sources don’t fetch enough or
sufficient information, external sources can be used. External sources are
those sources that present data that is collected by other businesses or
people. These are collected from outside the business’s environment and include
multiple sources. External sources can be wide and varied and hence one must
follow a controlled approach for assessing them.
Examples:
v Government sources – Several government sources can be used to collect a lot of
useful information about multiple subjects.
v Universities and colleges – Several college students and researchers collect and file
information that can be further used by businesses.
v The Internet – The Internet is the most used secondary market research
source but has the disadvantage of several non-credible sources with incomplete
information.
v Competitor data – Often, businesses use the information collected and filed
by other business organizations including that gathered by their competitors.
Mistakes To Avoid for Doing Market Research
i.
Resorting
only to secondary market research – While doing market research, one must avoid making the
mistake of doing only secondary research and neglecting primary market
research. It is true that secondary research is important and time-saving, but
primary research may bring about a fresh perspective, updated and latest
results and offers a better take at the market. Things like customer’s values,
psychology, attitudes, lifestyle and interests can only be known when one
conducts primary market research.
ii.
Resorting
only to primary market research – Another common mistake that must be avoided when doing
market research is doing only primary market research. Businesses often make
the mistake of spending so much time on primary research without validation
with the secondary data. Secondary research may offer some data and statistics
for free and may eliminate the need to go an extra mile for the same
information. Hence, all businesses must make it a point to do a little bit of
both the research works.
iii.
Using
only the web for research –
It is true that the information available on the web is the greatest database
for a wide variety of information and data but just relying on it only and not
using any other source could prove to be a big mistake as far as market
research is concerned. One must remember that the Internet may not always offer
reliable data and complete information. And, as they say, incomplete
information is dangerous. Thus, one must always make it a point to try out
other more credible sources as well such as government sources, previous
business files, etc.
iv.
Limited
vision – It is common for people to see what they wish to see, but
you just cannot afford to have tunnel vision if you are handling and running a
business. A mistake that businesses often tend to make is to remain within a
certain enclosure and not seeing what is outside it. They must rather make the
effort, no matter how long it takes to peep outside and take a glimpse at the
larger picture. Businesses must extend their vision, learn more and then apply
their functions to attract maximum people of different demographics.
v.
Not
being able to identify your target audience – One of the most common reasons or causes for the failure
of products, services, and business is the inability to identify the target
audience. While with some products, it is easier to tap the potential customers
but with some others, finding who are the real audience can be tough call. For
example – food products. But just because it is difficult doesn’t mean it is
impossible. It is highly important for all business companies to know exactly
who are their target audience and then focus their marketing and other efforts
towards them in particular.
vi.
Not
giving consumers an incentive to communicate with you – Consumers are smart and need to be given benefits in order
to get them attracted. Asking consumers to respond to a survey questionnaire
without giving them any incentive can be a big mistake. But, on the other hand,
offering the consumers a free coupon or a free voucher in return for their time
could suddenly turn the tide in your direction.
