IGCSE Business Studies - 3.2.1 Methods of Market Research

This section explores the various methods businesses use to gather information about their target market. Understanding these methods is crucial for effective business planning and decision-making.

Primary Research Methods

Primary research involves collecting new data specifically for the research question at hand. This data is collected directly from the target market.

1. Questionnaires or Surveys

A questionnaire is a set of questions designed to gather information from a large number of people. They can be administered in various ways, including online, by post, or in person.

• Advantages: Relatively inexpensive, can reach a large sample size, easy to analyse.
• Disadvantages: Low response rates can be an issue, respondents may not answer truthfully, questions may be misinterpreted.
• Types of Questions:
• Closed-ended: Provide pre-determined answer options (e.g., multiple choice, rating scales).
• Open-ended: Allow respondents to provide detailed answers in their own words.

2. Interviews

Interviews involve asking individuals a series of questions directly. This allows for more in-depth exploration of opinions and attitudes.

• Advantages: Allows for detailed probing, can gain deeper insights, can clarify ambiguous answers.
• Disadvantages: Time-consuming, can be expensive, potential for interviewer bias.
• Types of Interviews:
• Structured: Pre-determined set of questions asked in a fixed order.
• Semi-structured: A guide of topics to cover, but with flexibility to ask follow-up questions.
• Unstructured: Conversational, with no pre-determined questions.

3. Focus Groups

A focus group involves a small group of people (typically 6-10) who discuss a particular topic, guided by a moderator. This method is useful for exploring opinions and attitudes in a more interactive setting.

• Advantages: Generates rich qualitative data, allows for interaction and discussion, can uncover unexpected insights.
• Disadvantages: Can be expensive, group dynamics can influence responses, requires a skilled moderator.

4. Observation

Observation involves watching people in their natural environment to understand their behaviour. This can be done in a shop, online, or at a specific event.

• Advantages: Provides insights into actual behaviour, can identify unmet needs, relatively unobtrusive.
• Disadvantages: Can be time-consuming, observer bias can influence interpretations, may not explain the reasons behind behaviour.
• Types of Observation:
• Participant Observation: The researcher becomes part of the group being observed.
• Non-participant Observation: The researcher observes from a distance without interacting.

Method	Advantages	Disadvantages	Suitable for
Questionnaires/Surveys	Inexpensive, large sample size, easy to analyse	Low response rates, potential for dishonest answers, question misinterpretation	Gathering quantitative data from a large population
Interviews	In-depth insights, clarification of answers	Time-consuming, expensive, interviewer bias	Exploring opinions and attitudes in detail
Focus Groups	Rich qualitative data, interactive discussion, unexpected insights	Expensive, group dynamics, skilled moderator required	Exploring opinions and attitudes in a group setting
Observation	Actual behaviour, unmet needs, relatively unobtrusive	Time-consuming, observer bias, may not explain reasons	Understanding consumer behaviour in real-world situations

Choosing the Right Method

The choice of market research method depends on the specific research question, the budget available, and the time constraints. Businesses often use a combination of different methods to gain a comprehensive understanding of their target market.

For example, a business might use a questionnaire to gather quantitative data on customer preferences, followed by focus groups to explore the reasons behind those preferences in more detail.