Chapter 11: Market Research
1. What is Market Research?
Market research is the process of gathering, analysing and interpreting information about a
market.
Without it, a business could waste money on products nobody wants — or even fail.
Key Questions Market Research Answers:
• Would customers buy my product?
• What price would they pay?
• Where would they buy it?
• What do customers like or dislike?
• Who are the main competitors?
2. Product-Orientated vs Market-Orientated
Product-Orientated Market-Orientated
What it means Make the product first, find market Research the market first, then
later make the product
How common? Less common today More common — most modern
businesses
Examples Agricultural tools, fresh food Tech companies, consumer
goods brands
Risk High — product may not sell Lower — based on customer
needs
Market-orientated businesses need a marketing budget — a financial plan for promoting their
products.
3. Types of Information Collected
Type What it means Example
Quantitative Data about quantities/numbers "How many shoes sold in
December?"
Qualitative Opinions and judgements "What do customers like about
this product?"
4. Primary Research (Field Research)
Collecting original, first-hand data directly from customers.
Advantages:
• ✅ Up to date and specific to your business
• ✅ Not available to competitors
• ✅ First-hand and reliable when done well
Disadvantages:
• ❌ Expensive to carry out
• ❌ Time-consuming to collect and analyse
Methods of Primary Research
Questionnaires
• ✅ Detailed qualitative info can be gathered
• ✅ Can be done online, by post, face-to-face
• ✅ Vouchers or prize draws can encourage responses
• ❌ Poor questions lead to misleading results
• ❌ Time-consuming to carry out and analyse
Online Surveys
• ✅ Fast — quicker response times
• ✅ Cheaper than interviews or postal questionnaires
• ✅ Data easily presented and analysed using IT tools
• ❌ Cannot reach people without internet access
• ❌ Risk of fraud — people may answer carelessly for incentives
Interviews
• ✅ Interviewer can explain unclear questions
• ✅ Detailed information about likes/dislikes gathered
• ❌ Interviewer bias can affect answers
• ❌ Very time-consuming and expensive
Focus Groups
• ✅ Detailed consumer opinions and preferences
• ✅ Good interaction between members
• ✅ Quicker and cheaper than individual interviews
• ❌ Can be time-consuming and expensive if done by a specialist agency
• ❌ Discussion can be dominated by one person
5. Sampling
It is impossible to ask everyone, so a sample (smaller group) is used to represent the whole
population.
Type How it works Example
Random Sample Everyone has an equal chance of Every 100th name in a phone
being selected directory
Quota Sample A set number from specific groups 20 people aged 10–25, 30 aged
are selected 26–45, 20 aged 46–60
6. Secondary Research (Desk Research)
Using information that already exists and has been collected by others.
Advantages:
• ✅ Much cheaper than primary research
• ✅ Quicker to obtain
• ✅ Can give an overview of the whole market
Disadvantages:
• ❌ May be out of date
• ❌ Not collected specifically for your needs
• ❌ Available to all businesses — not exclusive
Sources of Secondary Research
Source Type Examples
Internal (inside business) Sales reports, finance records, customer records, complaints
data
Newspapers General info on economy, consumer trends, competitor activity
Government Statistics Population data, age structure, consumer spending habits
Market Research Agencies Specialist reports on specific markets — detailed but
expensive
Trade Associations Industry-specific info, e.g. agricultural association for farmers
Online Sources Company websites, government data, social media,
newspaper sites — check reliability!
7. Factors Affecting Accuracy of Market Research
• How carefully the questionnaire was designed
• The size of the sample — larger = more accurate
• Whether the sample truly represents the population
• How honestly people answered the questions
• The wording of questions — leading questions affect answers
• Bias in secondary data — may be deliberately misleading or out of date
8. Presenting Market Research Data
Raw data needs to be converted into a clear format so it can be understood and used.
Format Best Used For
Tally Chart / Table Recording raw data in its original form
Bar Chart Comparing quantities across different categories
Pie Chart Showing proportions / percentages of a total
Line Graph Showing trends over time
9. Designing a Questionnaire — Key Tips
• Ask no more than 12 questions
• Keep questions short and clear
• Use closed questions (yes/no, multiple choice) for easy analysis
• Use open questions only when opinions are needed
• Give age group ranges, e.g. 21–40
• Do not lead the interviewee toward a particular answer
• Order questions logically