If you plan to open a new business, or offer a new product or service, doing some primary market research can help show the success before you release it. 

In this article, we’ll explore:

  • Primary research: what it is and what it does.
  • Benefits of primary market research.
  • Primary market research methods to use.

Primary research: what it is and what it does

In its simplest terms, primary market research is information you collect about the market you want to enter. You can collect this information by yourself, or pay someone to collect it for you. Either way, the information is completely new.

Primary research provides the business with information about specific things that may be unique to the company. For example, asking locals to complete a questionnaire regarding their feelings about your business.

How local people perceive your brand, in particular, will likely not be interesting to other businesses in your area. 

There are no specific guidelines to who can and cannot conduct primary market research. As a business owner, gathering the right information could help to make your business more profitable.

Benefits of primary market research

Primary market research is perfect for your business, because you can learn specific weak points in your company so you can address them. 

Let’s say you run a t-shirt business. In that case, primary market research can help you determine how your customers feel about your t-shirts. Here are some questions you could ask: 

  • Do you like the material?
  • What do you think of the designs?
  • How would you change the print (quality, position, etc)?
  • What colours would you like to see more of?

There are two types of data you can collect with primary market research, qualitative and quantitative.

Qualitative research focuses more on a customer’s specific thoughts and feelings, and usually asks them for their opinions. This sort of information gives you detailed and targeted objectives for specific points of your business. 

Quantitative data, on the other hand, is data that can be counted or measured in numerical values. Typically, you gather this information from a large number of people.

This type of research can be examined pretty quickly, and can serve as a general indicator of what’s good and what isn’t.

One of the biggest benefits of primary market research is that it’s up-to-date. When looking at secondary market research, there’s always the chance that opinions have changed since the data was recorded. 

Primary market research doesn’t have that issue, and is much more reliable.

Primary market research methods to use

There are several different market research methods you can use. The right method for you depends on the type of information you want to gather. 

Below is each method you can use, with some pros and cons.

Observation

Observation is one of the easiest methods of primary market research, as it simply involves watching and recording how people behave

If you put up a new display in your shop window, you could record the amount of people who stop to look, and how many go into your shop after stopping. 

Observational research works best for retail businesses, because you get to see live reactions to specific products. It may not work for online businesses, since you don’t get to witness a customers’ response. 

Pros:

  • You don’t need to ask for input.
  • Works best with judging people’s reactions to a product.

Cons:

  • Information can be misleading or leave questions unanswered.
  • Someone needs to be actively observing.

Surveys and questionnaires

Surveys and questionnaires are perhaps the most common form of primary research. 

Using certain websites such as SurveyMonkey or Google Forms, anyone can create their own questionnaire or survey, and get members of the public to complete it. 

Some websites and businesses ask customers to fill out questionnaires after they have used a particular service or product. On the other hand, you may have a paper form customers can complete after they’ve visited your store.

If you want to see why local people use (or don’t use) your services, you may want to post a link to your survey in a local Facebook group. 

So what are the pros and cons of questionnaires and surveys?

Pros:

  • The responses can tell you exactly what you need to improve.
  • You can get a large number of responses quite quickly.
  • It’s a low-cost option for collecting data.

Cons:

  • Responses might not always be suitable.
  • It can take time to process the data properly. 

Focus groups

A focus group is when you gather a few individuals, and ask them questions about a certain topic. These people could be experts in a specific field, or they could be members of your target market.

When it comes to focus groups, you want to get a better understanding of how people view a niche market or business. You can then use this information to target your intended audience more effectively. 

Pros:

  • You can get high-quality information.
  • You can learn exactly what you need to improve on.
  • They provide exceptional insight into your target market.

Cons:

  • You might incorrectly indentify your target audience, which can create irrelevant information.

Telephone interviews

Like questionnaires and surveys, telephone interviews are a great way to get an individual’s thoughts. 

You may want to ask your existing customers for their opinions. If so, ask them for their contact number during or after their order, and mention why. 

This gives them the choice to opt-in or out, and increases the chances of a positive response.

Pros:

  • Gives your customers an opportunity to speak their mind.
  • You can get a lot of information from a smaller source.
  • Allows for follow-up questions with ease.

Cons:

  • People may not be interested in your phone call or interview.
  • Asking existing customers may not help to attract new ones.

Test marketing

Think of this as a soft-launch for your product or service. Instead of starting by making it available everywhere, you start with a small area and see how they react. 

You can use any feedback you gain to tailor the final launch. Tech-based companies typically roll out ‘alpha’ and ‘beta’ testing on their software. A certain number of users download, use, and report how the software works. 

This type of testing is excellent at finding issues that the designers may have not even considered. 

If you’re thinking about using test marketing for your business, you may want to consider how you intend to limit your audience. If you run a food delivery business, will you stick to a certain area, or invite specific households to use your services?

Pros:

  • Can alert you to any changes that need to be made.
  • Gives you a strong indication of how wider audiences will react.
  • Builds significant interest in your business or product. 

Cons:

  • Competitors can get an idea of your latest venture. 

If you liked that, try this

Primary market research isn’t the only form of market research you can do. If you want to learn more, we also have a guide on how to conduct market research before starting a business

If you’re still trying to set up your business, you might be struggling to secure investment. In that case, knowing how to write a business plan could prove extremely useful.

One last tip for running a successful business is to manage your money effectively. Most businesses fail due to cash flow issues, so keeping track of your finances is imperative to keeping your business afloat.

Accounting tools like the Countingup app can help simplify your bookkeeping. By combining a business current account with accounting software, you always have the most up-to-date information, right on your phone.
Download the app for free today.