Market research: methods and analysis

Market research is the systematic gathering, analysis and interpretation of information about a market. AQA expects you to know the difference between primary and secondary, qualitative and quantitative, and to evaluate research methods.

Why do market research?

• Reduce risk — avoid launching products customers don't want.
• Spot opportunities — under-served niches and emerging trends.
• Understand competitors — pricing, products, market share.
• Inform pricing — what will customers pay?
• Test marketing — pilot ads or packaging before full launch.
• Track performance — sales, satisfaction, NPS.

Primary research

First-hand information collected for a specific purpose.

Methods

• Surveys / questionnaires — paper, online (SurveyMonkey, Google Forms), in-store, postal, telephone.
• Focus groups — 6–10 people discussing a product/idea, led by a moderator.
• Interviews — one-to-one, structured or open-ended.
• Observations — watching how customers behave (e.g. eye-tracking in supermarkets).
• Mystery shopping — actors visit stores to assess service.
• Trials and pilots — limited launch with feedback.

Advantages of primary

• Bespoke — answers exactly your question.
• Up to date — reflects current customers.
• Confidential — competitors don't see it.
• Detailed insight — focus groups reveal why people buy.

Disadvantages of primary

• Expensive — agency fees, time, incentives.
• Slow — weeks or months.
• Sample bias — wrong sample distorts results.
• Skill needed — designing good surveys is hard.

Secondary research

Existing information from other sources.

Sources

• Market reports — Mintel, Statista, Euromonitor (commercial).
• Government statistics — ONS, gov.uk, HMRC.
• Industry / trade bodies — Federation of Small Businesses, sector reports.
• Competitor data — annual reports, websites, social media, trade publications.
• Internal data — sales records, customer database, website analytics.
• News and academic research.

Advantages of secondary

• Cheap or free — much is publicly available.
• Fast — already exists.
• Wide scope — population-level data.
• Useful for first scan of a new market.

Disadvantages of secondary

• Generic — not specific to your question.
• Possibly out of date — markets change fast.
• Same data competitors have — no advantage.
• May not be reliable — sources vary in quality.

Most businesses use both — secondary first to scope the market, then primary to dive deeper.

Qualitative vs quantitative

Qualitative

Words, opinions, feelings.

• Methods: focus groups, interviews, open survey questions, social listening.
• Strengths: depth, emotional insight, unanticipated findings.
• Weaknesses: small samples, subjective, hard to compare.

Quantitative

Numbers, statistics.

• Methods: closed surveys, sales data, web analytics, A/B tests.
• Strengths: large samples, statistical analysis, comparable.
• Weaknesses: misses why, blind to nuances.

Best practice: combine both. Numbers tell you what is happening; qualitative tells you why.

Sampling methods

A sample is a small group representative of the wider population. Methods:

• Random — every member of population has equal chance.
• Stratified — split by characteristics (age, gender), sample proportionally.
• Quota — set targets for groups, fill them.
• Convenience — easiest to reach (cheapest, but biased).

A poor sample can distort results badly. Famous example: 1936 Literary Digest poll predicted Republican Landon would beat Roosevelt — sample was wealthy car/phone owners, missing poor voters.

Sample size

Larger = more reliable but more expensive. Statistical formulas exist but a rough rule for consumer research is 200–400 per segment.

Use of ICT in market research

• Online surveys — SurveyMonkey, Google Forms (cheap, fast).
• Social media listening — monitor mentions, sentiment.
• Web analytics — Google Analytics, heatmaps (Hotjar).
• CRM — track every customer interaction.
• A/B testing — show two versions of an ad/page; measure winner.
• AI — analyse millions of reviews/comments at scale.

ICT has dramatically lowered the cost of research; small businesses can now afford methods only big firms could 20 years ago.

Limitations of market research

• Bias — leading questions, weak samples.
• Stated vs revealed preference — people say one thing, do another.
• Cost vs benefit — research costs may exceed value.
• Speed — markets change before research finishes.
• Privacy / GDPR limits.
• Honesty — respondents may lie or guess.

Real-world examples

• Lego — extensive research with children, parents and educators before product launches.
• Cadbury — Wispa relaunched in 2008 after viral consumer demand on Facebook.
• New Coke (1985) — failed despite extensive taste tests; ignored emotional attachment to original recipe.
• Apple — famously sceptical of market research ("People don't know what they want until you show it"). But still uses it for pricing and packaging decisions.

Examiner tips

For 6+ mark questions, distinguish primary/secondary and qualitative/quantitative, link to a specific business decision, and recommend a balanced approach.