The purpose of market research, the difference between field (primary) and desk (secondary) research, the main methods of each, and sampling, with their advantages and disadvantages.

What this key area is asking

Before a firm can satisfy customers, it must find out what they want, which is the job of market research. The SQA wants you to know its purpose, distinguish field (primary) from desk (secondary) research, describe the main methods of each, understand sampling, and weigh the advantages and disadvantages. Higher rewards balanced comparison and links to better decisions.

The purpose of market research

Good research helps a firm understand customer needs, spot gaps and trends, judge the likely demand for a new product, set the right price, and check how it compares with competitors. Without it, a firm is guessing, which is risky and expensive.

Field (primary) research

Field research gathers new, first-hand (primary) data directly from the source, usually customers. The main methods are:

• Survey or questionnaire: a set of questions asked in person, by post, phone or online, gathering opinions and facts from a sample.
• Personal interview: a face-to-face discussion giving detailed, in-depth answers and the chance to probe.
• Focus group: a small group led by a researcher to discuss a product or idea, giving rich qualitative views.
• Observation: watching how customers actually behave (for example in a store), which avoids what people say differing from what they do.
• Test marketing: launching a product in a limited area first to gauge the real reaction before a full launch.

Field research is up to date and specific to the firm's needs, and the firm owns the data. But it is expensive, time-consuming, and can be biased by a poor sample, leading questions or dishonest answers.

Desk (secondary) research

Desk research uses existing, second-hand (secondary) data that has already been gathered by someone else. Sources include:

• Internal records: the firm's own sales figures, customer databases and past reports.
• Government statistics: census data, official economic and population figures.
• Market reports: published industry research (for example from market-research agencies).
• The internet, trade press and competitors' material.

Desk research is cheap, quick and good for background and context, because the data already exists. But it may be out of date, too general, available to competitors too, or collected for a different purpose, so it may not exactly fit the firm's question.

Sampling

Asking every customer is impossible, so research uses a sample, a smaller group chosen to represent the whole target market.

Choosing the right research

Examples in context

Example 1. A supermarket using loyalty-card data (desk). A supermarket analyses its own loyalty-card and sales data (internal secondary research) to see what each customer buys and when. This is cheap, fast and highly relevant because it is the firm's own data, and it drives targeted offers. Its limit is that it only shows what current customers do, not what non-customers want, so the firm adds field research to fill the gap.

Example 2. A car maker test marketing a new model (field). Before a full launch, a car manufacturer runs focus groups and limited test marketing of a prototype to gather real reactions to the design and price. This field research is expensive and slow but gives up-to-date, specific feedback that lets the firm fix problems before committing to mass production, showing why primary research is worth the cost for a major decision.

Try this

Q1. Distinguish between primary (field) and secondary (desk) research. [2 marks]

• Cue. Primary (field) research gathers new, first-hand data directly from customers (surveys, interviews); secondary (desk) research uses existing data already gathered by others (government statistics, market reports, internal records).

Q2. Explain two disadvantages of using desk research. [4 marks]

• Cue. The data may be out of date, as it was gathered earlier; it may be too general or collected for a different purpose, so it does not exactly fit the firm's question; and competitors can access the same published data, so it gives no advantage (any two, developed).