Methods of Market Research

Different Types of Market Research Methods

Regarding primary research, the various market research methods can be separated into five categories: surveys, interviews, focus groups, observation, and field experiments (see Figure 1 below). On the other hand, researchers might opt for using secondary research methods, which include exploring internal or external data.

Methods of market research: Surveys

Surveys are one of the most commonly used market research tools. Surveys can be either digital (online surveys) or physical (survey cards). Surveys are often used in the service industry to understand how customers experience different attributes of a service. For example, they are often used to measure customer satisfaction.

Surveys are helpful when you want to measure something quantitatively and have a relatively large sample to survey.

Methods of market research: Focus groups

Usually, a small number of people participate in the focus group (smaller sample size than surveys). These people tend to share demographic traits or share similar characteristics. A focus group involves a moderator who asks the group open-ended questions and guides the discussion.

Focus groups are great for qualitative research, as participants are free to elaborate on a thought or experience they have regarding the research topic. However, focus groups can also lead to issues of bias if people do not feel comfortable expressing their genuine opinions in front of the rest of the group.

Methods of market research: interviews

Interviews are similar to focus groups, although they usually involve fewer people. The interview is generally focused on one individual, with a moderator asking them questions.

Interviews are useful for qualitative research and profoundly understanding a customer's thought process behind a decision or behaviour.

Methods of market research: observation

There are two different types of observations. In the first type, the researcher has no interaction with the subject; in the second type, the researcher has some interactions with the subject. There are many ways in which marketers can use observation for business research.

Observational research is helpful as it lets researchers know the actual behaviour of customers rather than what they tell the researcher or report in a survey.

Methods of market research: field experiments

Field experiments tend to be a more scientific way of doing market research.

Field experiments are valuable for quantitative research and beneficial for businesses as the research is specific to a product or brand - the study meets the precise research needs of the company.

Methods of market research: secondary research

On the other hand, secondary research involves exploring existing data. The data researchers use for secondary research has already been collected by someone other than the researcher for other purposes.

Secondary data can be collected both internally and externally and may include gathering data from:

• Internal reports - sales figures, inventory records, customer profiles, loyalty programmes, financial reports, etc.

• External data - market reports, internet research, academic journals, Statista, Euromonitor, etc.

Figure 2 below outlines the two methods of secondary market research.

Digital Methods of Market Research

Digital market research can take the form of both primary and secondary research. Traditional research methods like surveys, interviews, and focus groups can all be conducted digitally. For example, sending out e-mail surveys and conducting interviews on platforms like Zoom or Google Meet may be considered digital market research methods.

However, digital technologies have also given rise to new types of market research. For example, certain companies might use eye tracking technology in-store to understand the customer purchase journey (observational research). Other companies might use heatmaps to track users' movements, scrolling patterns, attention areas, and clicks on websites and online spaces. This methodology is especially prevalent for e-commerce businesses. Furthermore, many brands nowadays use social media as a market research method, allowing firms to collect data on consumer behaviour and attitudes. Additionally, as digital techniques are becoming more accessible to all, companies may decide to use a combination of various digital market research methods.

Methods of Market Research Advantages and Disadvantages

Let's now take a closer look at the advantages and disadvantages of the different market research methods, namely, primary and secondary research methods.

Methods of market research: advantages and disadvantages of primary market research

Some of the advantages of collecting primary market data include:

• It is specific to the business.

• It can provide unique insight into customers' wants, needs, characteristics, attitudes, and behaviours.

• It can provide unique insight into chosen markets and the individual business's competitive environment.

• It meets the business's exact needs as they are the ones planning the research topic, (sometimes) collecting the data, and interpreting the results.

• The business can discover insights that competitors do not have access to.

• It can help in formulating a market strategy.

Some of the disadvantages of collecting primary market data include:

• It can be quite costly.

• It can be very time-consuming.

• It needs specific knowledge and skills to be carried out.

• The company often requires a specialised team to conduct the research and collect and interpret the data.

• The business might not gather enough comprehensive information to guide you in creating an effective strategy or making appropriate decisions.

• The organisation might end up having to do further research.

Methods of market research: advantages and disadvantages of secondary market research

Some of the advantages of conducting secondary market research include:

• It is less costly than conducting primary research.

• It is more simple to gather.

• It is quicker than conducting primary research.

• It can be easier to analyse as the data has already been organised and formatted in one way or another.

• It can provide access to industry-specific knowledge and information.

Some of the disadvantages of secondary market research include:

• It can provide data that is less specific to the business.

• It provides data that is less specific to the research objectives.

• The data gathered might not be sufficient to answer the research question.

• The data may have been collected long ago, making it less relevant to the marketer's research needs.

• It is not always formatted as the researcher expected it to be.

• It is available to everyone, including competitors.

• It may be biased, incomplete, or inaccurate when conducted by a non-reputable organisation.

Examples of Market Research Methods

Imagine you are working as a marketing manager for a chain of restaurants. You notice that your online customer reviews are not as good as you would like them. To understand why customers rate your restaurants poorly, you do some market research.

You decide that collecting primary data is the most effective way to research this problem. So, you ask your customers to complete an online survey after dining. The sampling method you use is convenience sampling, as you provide the survey to any customer that volunteers to complete it. The survey consists of questions like:

• How would you rate the quality of food in our restaurant?

• How would you rate service quality in our restaurant?

• How would you rate the selection of food options in our restaurant?

Once enough people have completed your survey, you analyse your data. It is clear that people are rating your restaurant poorly because they are not satisfied with the food quality. As a result of your market research, you decide to inform management that they should invest in better quality ingredients. Finally, you choose to launch a marketing campaign informing consumers about your newly designed menu, with fresher ingredients than other chain restaurants.