Market research methods and their uses
Two types of research can be used, primary research and secondary research. Primary research is about discovering your own new knowledge. The advantage of primary research is that you as a business can decide on the exact type of information you want to collect so that it’s completely relevant to your circumstances and needs each time. The disadvantages of primary research are that gathering the information can be expensive if a business needs to use a specialist agency or company and it takes time to do it yourself.
Primary Research
Primary research includes different methods in order to collect the information. Click on them to see more.
Survey
Dyma enghraifft o dudalen o holiadur y Cyfrifiad. Mae’r Cyfrifiad yn arolwg sy’n digwydd bob 10 mlynedd yn y Deyrnas Unedig ac mae gofyn i bob teulu ei lenwi ar ddiwrnod penodol. Oherwydd maint mawr y sampl mae’r Cyfrifiad yn ffynhonnell bwysig o wybodaeth. Cynhaliwyd y Cyfrifiad mwyaf diweddar yn 2021.
Interview
Interviews involve meeting customers one to one. In an interview you can ask questions about the product or service and discuss with the customer. The same type of questions can be used as in a questionnaire, but it’s possible to enquire more deeply and have a wider discussion. This method can gather a lot of information, but it takes time, and the sample size is small unless a large number of interviews are carried out.
Observation
Observation involves watching how the customer reacts or behaves in general. This type of research is used by supermarkets to see how customers move around the store. In this way they know where to locate goods they want customers to notice and buy.
Next time you are in the supermarket, notice which goods are on the edges of the aisles and which goods are in your line of sight and which ones are higher and lower. Is there a clear pattern?
Trials
Trialling a product or service gives customers the chance to try the product and give feedback. It’s also an opportunity for a business to see how the product or service will work in the real world. This is often seen with apps and software where the customer can get 7 days or 30 days free if they sign up for a subscription.
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Why do you think Cwmwl Clyd offers a free session?
Focus Groups
A focus group is a group of consumers drawn together to discuss a product. This can give businesses a lot of information on customers’ feelings about their product and it can be very useful for a business that wants to launch a new product or to understand more on how consumers feel about a product that is already on the market.
Secondary Research
Secondary research on the other hand is about information that is already available. It can be internal or external. One of the advantages of secondary research is that it can be faster than primary research because it’s already there. It should also be cheaper, although some sources of secondary research need to be paid for.
But secondary research is not tailored to the needs of the business, and it can take time and money to adapt it to their purpose. Also, with research that comes from outside the business, unless the research details their methodology, there is no way of knowing if the research has been done in a reliable way.
Internal secondary research
This is data that the business already has, for example sales figures.
From these figures they can see when they sell more or less goods and services. This includes what people buy at different times of the week, year and over time.
They also have any market research carried out in the past.
Some businesses offer loyalty cards. These enable a business to keep a great deal of information about its customers as well as what they buy. The customer elects to give this information to the business in order to receive special offers.
The Tesco Clubcard is a well-known loyalty card. The screenshot below shows the information needed to register.
What information will Tesco have about the customer?
How will this information be of use to Tesco?
Loyalty cards give businesses a great deal of information as they can match the purchase with the type of customer. For example, Tesco will know what the customer buys, their gender and their geographical location and so they are able to create a picture of their existing customers which helps them target marketing more effectively to these customers and similar ones.
External sources
Specialist research firms such as Ipsos, Kantar and YouGov are also able to conduct research on behalf of businesses. They also do useful general research. Trade journals can also be useful sources of information for businesses. There are hundreds of trade journals for different sectors. Click here to see some examples: