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4.4

Market research

Unit 4 · Marketing · SL and HL

Market research gathers information about customers, competitors and markets to reduce the risk of business decisions. This page covers why and how businesses research, primary and secondary methods, qualitative and quantitative data, and three sampling methods. It is also directly useful for your IA, where your supporting documents are a form of market research.

🎯What you need to be able to do

  • Evaluate why and how organizations carry out market research.
  • Explain primary research methods: surveys, interviews, focus groups and observations.
  • Explain secondary research methods: market analyses, academic journals, government publications, media articles and online content.
  • Explain the difference between qualitative and quantitative research.
  • Explain quota, random and convenience sampling.

📚The business management

Why businesses research markets

  • To identify customer needs and gaps in the market (market orientation).
  • To estimate demand and forecast sales before launching.
  • To understand competitors: prices, products, strengths.
  • To test products, prices, packaging and promotions.
  • To monitor customer satisfaction and brand image.
  • To reduce the risk of costly mistakes and to support finance applications.

Primary research

Primary (field) research collects new, first-hand data for a specific purpose.

  • Surveys (questionnaires): set questions online, by phone or in person; many respondents; closed questions give quantitative data. Wording and response bias affect results.
  • Interviews: one-to-one, in-depth; rich detail and follow-up questions; time-consuming and interviewer bias possible.
  • Focus groups: a small group discusses a product or idea led by a moderator; reveals attitudes and reactions; not representative, and dominant members sway others.
  • Observations: watching how customers actually behave (in store, online analytics); shows real behaviour, not what people say; does not explain why.
Advantages of primary research
specific to the firm’s needs; up to date; confidential from competitors.
Disadvantages
costly and time-consuming; needs expertise; small samples may be unrepresentative.

Secondary research

Secondary (desk) research uses data that already exist, collected by others.

  • Market analyses (reports by research firms), academic journals, government publications (BPS statistics, trade data), media articles, and online content (company websites, reviews, social media).
Advantages
quick and cheap (often free); large-scale data a small firm could not collect; useful starting point.
Disadvantages
may be outdated or not specific; available to competitors; reliability and bias of sources vary; commercial reports can be expensive.

Qualitative and quantitative research

Quantitative
numerical data that can be measured and analysed statistically: “62% of respondents would pay Rp 30 000”. Good for estimating demand and comparing; may miss reasons.
Qualitative
opinions, attitudes and motivations, usually in words: “I prefer it because the packaging feels premium”. Good for understanding why; harder to analyse and generalize.

Sampling

A sample is a subset of the population surveyed. A larger, well-chosen sample is more likely to represent the population but costs more.

Three panels of the same population made of two groups, squares and circles. Random sampling picks 12 members scattered across the population with equal chance. Quota sampling picks fixed numbers from each group, 6 squares and 6 circles. Convenience sampling picks the 12 members nearest one corner, easiest to reach.
Three ways to choose a sample of 12 from the same population.
  • Random sampling: every member of the population has an equal chance of selection. Reduces bias; needs a list of the population and can by chance under-represent groups.
  • Quota sampling: the researcher fills set numbers from each segment (for example 50 men and 50 women aged 18–30), choosing people within each quota. Quick, represents key groups; selection within quotas may be biased.
  • Convenience sampling: whoever is easiest to reach (friends, people passing by). Cheap and fast; high risk of bias, so results may not represent the market.

✏️Worked example

A start-up plans a healthy frozen-meals brand for young professionals in Jakarta. Recommend a market research plan.

Secondary research first (cheap): market reports on ready-meal growth, BPS data on urban incomes and household sizes, competitor websites and online reviews to find complaints about existing products.

Primary research: an online survey of about 300 young professionals using a quota sample (by age band and area) to estimate demand and acceptable prices (quantitative); two focus groups to test flavours and packaging (qualitative); later, a small trial in a few minimarkets with observation of sales.

Evaluation: combining methods balances cost, speed and depth; quota sampling ensures the target segment is covered, although online surveys exclude people less active online.

Check it. A good plan states what to find out, which method answers each question, and the sample; and it is proportionate to the budget.
Confusing qualitative with primary. Primary vs secondary is who collected the data; qualitative vs quantitative is what kind of data. A survey can be primary and quantitative; a published interview is secondary and qualitative.

📝Practise

Work through these on paper, then reveal the answer.

1. [2 marks] Define the term secondary research.
Research using data that already exist, collected by others for another purpose, such as government statistics or market reports.
2. [2 marks] Distinguish between quota and random sampling.
In random sampling every member of the population has an equal chance of selection; in quota sampling the researcher selects a set number of people from each segment of the population.
3. [4 marks] Explain one advantage and one disadvantage of using a focus group.
Advantage: discussion reveals detailed attitudes and reasons (qualitative insight) and reactions to prototypes. Disadvantage: a small group is unlikely to represent the market, and dominant participants or the moderator can bias opinions.
4. [4 marks] Explain why a small business might rely mainly on secondary research.
It has a limited budget and time; secondary sources (government statistics, online reviews, competitors’ websites) are cheap or free and quick to access, and give a broad view of the market. It may add small, low-cost primary research (talking to customers) later.
5. [4 marks] Explain why observation may be more reliable than a survey for studying shopping behaviour.
Surveys record what people say they do, which can differ from what they actually do (memory, wanting to give acceptable answers). Observation records actual behaviour, such as which shelves shoppers visit, how long they compare prices, and what they buy. However, it does not explain why.
6. [10 marks] Discuss the usefulness of social media data as a source of market research for a fashion brand.

Useful: large volumes of real-time data on trends, reactions and competitors; cheap; direct access to the target segment; analytics measure engagement.

Limitations: users are not representative (younger, more active online); fake accounts and bots; opinions expressed publicly differ from buying behaviour; privacy and ethical concerns; interpretation needs skill.

Judgment: very useful for spotting trends and testing ideas quickly, but should be combined with sales data and structured primary research.

🔗Go deeper — other people’s work

These are external resources, not mine. If one stops working, tell me and everything above it on this page still stands.

  • Badan Pusat Statistik (BPS) — free Indonesian statistics on population, income and spending.
  • Pew Research Center — examples of well-designed surveys and sampling methods.
  • Google Trends — free secondary data on what people search for.