What Is Primary Market Research And How Is It Performed?
Primary market research, also known as field research, is new research that a business undertakes by itself or through a hired third-party company.
This type of market research involves collecting new market data that has never been collected before. This provides a business with customised research data that is specific to its own circumstances.
Methods of primary market research
Methods of primary market research include:
- postal surveys
- telephone interviews
- online surveys
- face-to-face surveys
- focus groups
- test marketing
Observation is a primary market research method that involves watching customers to determine how customers react to certain products or services. For example, this could involve watching how people behave when they walk by, look at the window display of a product.
However, observation can provide many useful insights, but can still leave questions unanswered.
Another way of doing primary market research is by posting questionnaire surveys to the addresses of potential customers. The recipients of postal surveys are expected to complete the survey form and post it back to the company in a pre-paid envelope.
Each potential customer is sent a questionnaire which contains a set of questions to find out the customer’s opinions. The questions can either be open ended or close ended.
Open ended questions aim to get detailed opinions by allowing customers to respond in their own words. An example of an open ended question is, "What do you think of our new brand of mobile phones and what do you think can be done to improve user experience?".
Close ended questions do not allow customers to respond in their own words. They are given a set of responses to choose from. For example, "On a scale of one to ten, how do you rate the experience of using our new brand of mobile devices?"
This is a relatively cheap way of covering a wide geographical area and avoiding interviewer bias. However, one of the drawbacks of postal surveys is that the response rates are usually very low. Some people do not send the form back, while others take a long time to send it back.
Performing telephone interviews is another cheap way of covering a wide geographical areas. Unlike postal surveys, telephone interviews allow quicker feedback.
However, some potential customers view this as an intrusion of privacy and may be reluctant to give anything useful except for short answers.
Online surveys are increasingly popular as more people become connected through the internet. The cost of performing online surveys is relatively low. Online surveys can contain open ended and close ended questions just like in postal surveys.
There are many ways of creating an online survey. One of our favourite ways is by using SmartSurvey. SmartSurvey allows you to create online surveys and forms with a user friendly yet advanced survey software. They also provide a great free plan that has all the useful features you need.
Here you can click to see an example of an online survey we created freely using SmartSurvey.
Disclaimer : We are not affiliated to SmartSurvey in any way. The links above are not affiliate links. We only provided them to show an example of how an online survey works.
Performing personal face-to-face surveys (interviews) is costly, but good way to get detailed insights from an individual in real time. However, face-to-face surveys are limited to the geographical area accessible to the interviewer and are subject to interviewer bias.
A focus group is a group interview of potential customers who are brought together to discuss how they feel about a product, service, feature or market. It can take place in person or online.
In a focus group, people can be asked questions on their opinions about a product or service. Their replies provide businesses with more in-depth information than questionnaires and that makes focus groups good for collectively getting detailed information from customers.
However, just like any statistical sampling method, the size of the group affects the reliability of the data obtained. A smaller group does produce not enough opinions to model the response of a bigger market. A very large group is difficult to manage and some participants may not get enough chance to contribute.
This method involves pre-releasing a new product in a small section of the target market to assess customer reaction. For example, software development companies usually release "beta" versions of their new products to a small of potential customers for testing.
This method can be a good predictor of how a new product or service will be received by the larger market. The reaction from the test market also gives the company a chance to iron out any issues before the release of the product. However this method is not suitable for a product that is supposed to be kept secret from competitors.
Advantages of primary research
- The data obtained is up-to-date.
- The data is unique to the circumstances of the research.
- The data you collect belongs to you and competitors cannot get the data, unless you publish it or sell to them.
Disadvantages of primary research
- Data can be difficult to collect
- Can be slow in collecting data depending on the method used.
- Can be expensive to collect.
- Can be misleading or inaccurate, due to sample size constraints.