5.1 - Methods of Primary and Secondary Research

A business conducts market research to identify relevant information in relation to customer, products and markets.

It's usually necessary for business growth, development and survival to carry out market research regularly as the markets, customers and the business environments are constantly changing.

Through market research, a business can identify it's strengths, follow current business trends, seek to enhance available opportunities and improve the areas it struggles with.

Market research involves collecting information and investigating key factors:

• Future impacts of the environment on business
• The marketing mix
• The overall business environment

Market research can tell you a great deal about the attitude of customers to your own company and products, information you might not already appreciate or realise.

Activity 15 - Which do you think is better, Primary or Secondary research?

Primary Research

This process involves gathering new data and generally uses a specialist market research agency in order to conduct the research. The data gathered is now and up to date.

Field research is the mode of collection of primary research information. It requires the market researchers to get involved in the project and directly interact with the main targets of the market research. Such targets that are needed to participate in the market research are called the respondents or subjects of the market research. 

A lot of time an effort needs to be invested in primary research. Since it's the main focus of the market investigation, every activity involved in the project revolves around the data collected in the field research. Hence it's important the the information is accurate and reliable. 

Typical examples of primary research include:

• Focus groups
• Surveys
• Experimentation
• Discussion panels
• Observation
• Field trials

Focus groups select individuals who meet specific pre-set criteria and invite them for a group conversation. The intention is that they are representative of a larger target audience, for example existing or potential business customers, distributors or other members of the business' network suppliers, distributors among others. 

Market research agencies use survey tools to gather and collate information for the market research project which they are conducting on behalf of the business.

Surveys could be conducted face to face, electronically or via telephone. Surveys target specific groups and use the views and feedback of the respondents to collect relevant data to the market research. 

Experimentation uses respondents of a certain targeted group to test newly developed products or prototypes, before the products go to market. 

Discussion panels rely on the expertise of individuals in a particular business field. Through their wealth of knowledge about the field, they provide tremendous experience and valuable input to the research product. 

Observation is used to study the behavioural characteristics of the respondents over a period of time. With the use of technological advancements, it can now be doing using security/discrete cameras, in addition to face observations. 

Field trials follow up on the information gathered from group discussions and actually try the outcome of the responses.

Activity 16 - Do you think primary research data is always reliable?


Secondary Research

Secondary research makes use of previously collected data which it then uses as the basis of conducting market research.

The findings of this information can then be used for the purposes of marketing. Statistical publications are a common form of secondary research.

Published texts including journals, newspapers, magazines, e-zines and census data are all examples of secondary research data.

There are two types of sources of secondary research data:

• External data - from sources outside the business
• Internal data - from information which the business possesses, for example on products, sales, customers, accounts

Trade journals, company reports, the internet, universities, libraries and official statistics are sources of external data. 

Internal data sources include sales figures, information from products, data records, website monitoring, account records, loyalty schemes and Electronic Point of Sale (EPOS).