Market Research Techniques Primary and Secondary Market Research

Market Research Techniques Primary and Secondary Market Research © Shutterstock.com | PureSolutionIn this article, we will deep dive into the topic of Market Research Techniques. We will start with 1) an introduction to market research, explore then 2) primary and 3) secondary market research, as well as finish with 4) the mistakes to avoid when doing market research.MARKET RESEARCH: AN INTRODUCTIONMarket Research is a term that is used to refer to a process of gathering or collecting information about target audience or target market. The main role of the concept of market research is to provide a company or a business organization with an in-depth view of the customers or consumers in order to be able to satisfy their needs better. The process of market research is integral to be able to compete with other players in the same industry and helps to analyze things like market size, competition and market needs.Market research makes use of analytical and statistical techniques and methods to gather and interpret information in an organized fashion . This process also involves opinion and social research and is important in today’s increasingly complex business environment. In such a scenario, businesses cannot just rely on their ‘gut-feeling’ to run things, and this is why market research is needed.Factors to be investigated through market researchMarket research can be considered as a method of getting an idea of the needs of the customers, and some of the factors that can be investigated through this process are given as follows:Trends in the market Market trends or trends in the market are the movements of a market in a given period of time.Segmentation of the market This is the division of a market into subgroups with similar features. This is needed to create a distinction between demographics, choices, genders, and personalities, etc.Information available Market information is the information about prices of different products available in the market.SWOT analysis This analysis is an analysis of the Strengths, weaknesses, opportunities and threats to a business or company.Effectiveness of marketing Marketing effectiveness takes into account risk analysis, product research, customer analysis, and competitor analysis, etc.Benefits of market researchTapping opportunities One of the biggest benefits of conducting market research is that it enables you to find out the various market opportunities and makes it possible to tap into them effectively. For example, it may help you to find whether your product is suitable for the audience you have targeted or not, and if it isn’t, then market research helps to identify the suitable audience.Encouraging communication Market research helps you to find out the best way to communicate with your customers. After obtaining research results, one tends to know the audience nature, personalities, likes, dislikes, etc. and this makes it easier to connect with them and reach out to them.Minimization of the risks Another major benefit of market research is that it helps businesses minimize risks by taking actions on certain subjects. For example, it may help to add certain qualities to products that may reach out to number of people, thus decreasing chances of the product going not used.Establish trends and market standing The market changes continuously and constantly. In such a scenario, only thorough market research can help to establish the ongoing trends and then formulate plans according to the current customer needs and requirements.Find out possible problems Since market research brings out the customer reactions, choices, and preferences, a business can alter the product while it is still in the manufacturing or designing process. It is easier to find problems and then work on them if one has research results in hand.Types Of Market Research TechniquesPrimary Market Research. Primary market research is a kind of market research which is done by the business or company itself with the objective of gathering information th at can be used to improve the products, services, and functions. Primary market research is also known as field research since it is research done from scratch, without using any information that is already made available through other sources. One can gather primary data or information through qualitative research methods as well as quantitative research methods. Primary market research is the most common type of a market research method and is also the most valuable type. It is a method that only answers specific questions and not irrelevant issues.Secondary market research. As opposed to primary market research, secondary market research is a research technique that does not aim to gather information from scratch but relies on already available information from multiple sources. This research focuses on data or information that was collected by other people and is available for either free or paid use for others. Secondary market research takes into account many different sources for collection of information including government data, office data, newspapers, magazines, the internet, etc. One of the benefits of doing secondary market research is that it is mostly free and takes a lot less time.Qualitative research. Qualitative research or qualitative market research is a kind of a research method which mainly takes into account the opinions and feelings of a customer as far as a business’s products and services are concerned. This type of research tries to get behind the customer’s mind to fathom what they see lacking or whether they truly like the product or not. Some common examples of qualitative research work include doing face to face interviews, being part of focus groups, etc.Quantitative research. Quantitative market research is a kind of market research work that is based on hard facts and statistical data rather than the feelings and opinions of the customers or consumers. This type of research can prove useful both in terms of primary market research and secondary market research. Some of the common examples of quantitative research include exit surveys, questionnaires, on-site fieldwork and the shopping bag survey. In fact, another example of quantitative research includes researching of the previously existing financial reports, research papers. This type of research comes out with a wide range of statistics and helps to find out the size of the market as well.PRIMARY MARKET RESEARCHThe following are the five Primary market research techniques that are most commonly used and applied:Focus groups. One of the main ways used to conduct primary market research is through focus groups. This method involves getting a group of people in a room or a place and asking them insightful questions regarding the product, its development, their preferences, and feedback, etc. These types of focus groups can be run or conducted at any location feasible for the company or business. These days, with advancements in technology and the i nternet, it is possible to conduct them virtually as well, through the method of video conferencing. But the main thing here is that the group of people brought together have something in common, for example, either they should belong to the same age group, the same gender and so on. This division of the group or the selection process must depend on the audience targeted or the product of service of the company. Participants in such focus groups are then compensated by either free coupons, vouchers, gifts or money, etc. Focus groups fall under the qualitative research method and help businesses know a lot about customer or market trends.Surveys and questionnaires. Another superb and highly effective way to conduct primary market research is through surveys and questionnaires. The term ‘surveys’ is a broad term that covers a lot of things such as survey questionnaires, survey forms, survey interviews and customer satisfaction cards, etc. One of the most common examples of this re search method is the feedback form given to customers at the time of billing at a restaurant. It is a straightforward method of knowing whether or not the customer is satisfied with the business’s existing services and products or what kind of changes would the consumer like to see. Surveys are also conducted in the form of web questionnaires these days that enable businesses to collect a lot of feedback and then analyze it for further administration.Observation. There are two major observation techniques or research methods used in primary market research, and they are observation through interaction and communication with the subject and observation through no interaction and communication with the subject. This form of research method comes under the quantitative primary research since through it; researchers evaluate or measure the behavior of the respondents or the users in general. This is more of a personal approach in comparison to surveys and questionnaires, etc.Trials an d experimentation. This method of primary research involves scientific tests where hypotheses and variables, etc. are used. This is a quantitative type of market research which may either be controlled out in the field or within controlled environments. In order to understand this form of research, here is an example that you can refer to: A food product company created 3 different food packaging styles and then sold the products to different consumers. After a limited period of time, it analyzed the sales and came to a conclusion about the preferred packaging style or design.In-depth Interviews. One may think of an in-depth interview to be a quantitative approach to primary market research, but this method, in fact, is a qualitative research that takes into consideration the kinds of choices and preferences a customer base has. Interviews, unlike focus groups, involve interaction between one moderator and one respondent and several types of modes and methods may be used to conduct them. Interviews may not always be restricted to a set pattern of questions but can also be in the form of a conversation with the target customer base or audience. This kind of a research method helps to dig further into what the customer wants, and the answers can later be analyzed to come to a conclusion for the final product delivery.SECONDARY MARKET RESEARCHSecondary market research is mainly based on collecting information from different sources and then coming to a conclusion. The following are the two main types of Sources of Secondary market research data:Internal sources. Internal sources are those kinds of secondary market research sources that already exist and are collected in the business’s database or file system. Internal sources include information that has already been collected by the company and proves useful for future projects, etc. For most businesses, internal sources may prove enough to develop new products and services, and this may not require them to lo ok outside.Examples:Balance sheets Previous balance sheets of the business can be referred to in order to find stats and figures that may prove useful for evaluation.Profit and loss statements Profit and loss statements can be consulted to find out what kinds of products and services resulted in profits previously.Inventory records This is another piece of data which can be used as a source for secondary market research and puts into focus many stats and figures.Sales figures Companies store their previous sales figures so that they can be analyzed and used for further research.External sources. In case the internal sources don’t fetch enough or sufficient information, external sources can be use. External sources are those sources that present data that is collected by other businesses or people. These are collected from outside the business’s environment and include multiple sources.External sources can be wide and varied and hence one must follow a controlled approach to assessing them.Examples:Government sources Several government sources can be used to collect a lot of useful information about multiple subjects.Universities and colleges Several college students and researchers collect and file information that can be further used by businesses.The internet The internet is the most used secondary market research source but has the disadvantage of several non-credible sources with incomplete information.Competitor data Often, businesses use the information collected and filed by other business organizations including that gathered by their competitors.MISTAKES TO AVOID WHEN DOING MARKET RESEARCHDoing only secondary market research While doing market research, one must avoid making the mistake of doing only secondary research and neglecting primary market research. It is true that secondary research is important and time-saving but primary research may bring about a fresh perspective, updated and latest results and offers a better take at the ma rket. Things like customer’s values, psychology, attitudes, lifestyle and interests can only be known when one conducts primary market research.Doing only primary market research Another common mistake that must be avoided when doing market research is doing only primary market research. Businesses often make the mistake of spending so much time on primary research that they forget that using secondary sources for data could also prove useful and a lot more time-saving. Secondary research may offer some data and stats for free and may eliminate the need to go an extra mile for the same information. Hence, all businesses must make it a point to do a little bit of both the research works.Using only the web for research It is true that the internet or the web is the greatest database for a wide variety of information and data but just relying on it and not using any other source could prove to be a big mistake as far as market research is concerned. One must remember that the inter net may not always offer reliable sources and complete information. And, as they say, incomplete information is dangerous. Thus, one must always make it a point to try out other more credible sources as well such as government sources, previous business files, etc.Limited vision It is common for people to see what they wish to see, but you just cannot afford to have tunnel vision if you are handling and running a business. A mistake that businesses often tend to make is to remain within a certain enclosure and not seeing what is outside it. They must rather make the effort, no matter how long it takes to peep outside and take a glimpse at the larger picture. Businesses must extend their vision, learn more and then apply their functions to attract maximum people of different demographics.Not being able to identify your target audience One of the most common reasons or causes for the failure of products, services, and business is the inability to identify the target audience. While with some products, it is easier to tap the potential customers but with some others, finding who your real audience is can be tough. For example food products. But just because it is difficult doesn’t mean it is impossible. It is highly important for all business companies to know exactly who their target audience is and then focus their marketing and other efforts towards them in particular.Not giving consumers an incentive to communicate with you Consumers are smart and need to be given benefits in order to get them attracted. Asking consumers to respond to a survey questionnaire without giving them any incentive can be a big mistake. But, on the other hand, offering the consumers a free coupon or a free voucher in return for their time could suddenly turn the tide in your direction.