Primary Market Research: What Is It and How Does It Work?

Market research is an important part of business. Delaying it for more than a few months is ill advised, as so much can change during that time. Just think about how fickle customers are––or the emerging competitors invading your category each week. Let’s take a look at what market research is and how it works, so you can propel your efforts forward today!


As a consumer and market intelligence provider, we have seen enough of the constant change in the marketplace to know that market research should be an ongoing activity for all businesses. With advances in technology and availability of research tools that provide near effortless, real-time market research, there really is no excuse for you not to stay updated on the goings-on in your market. But that’s really secondary research, one of the two types of market research that you should be doing. The other, primary market research, is the subject of our discussion today. Let’s see what it is exactly!

What is Primary Market Research?

The type of intelligence found in market research can come from two main sources: Your own internal investigation and external sources. Primary market research refers to the first of the sources.

Primary market research is where you gather data internally, or directly from the sources of your investigation, through various methods that we are going to look at in the next section. It’s a huge task and one that calls for a dedicated team to perform this process comprehensively. However, since it tends to be costly, many small and mid-sized businesses do not always have the budget to maintain such a team. Therefore, they may hire an external firm to conduct the research for them. This also qualifies as primary market research.

Secondary market research involves analyzing the reports of studies that have been conducted by others to find relevant insights. Those others may include the government, large research organizations such as McKinsey and Deloitte, or other businesses in the industry. Reports are either freely shared or sold at a nominal fee. Note that such research is not specific to a single business and hence not customizable to your needs. But worry not. Thanks to advances in the field, modern businesses can conduct secondary market research that is highly customized, feeling almost like primary market research.

Using third-party tools like NetBase Quid® and Rival IQ, the modern business is able to access the exact kind of data it needs to derive specific intelligence. Brands now have the power to supplement their traditional primary and secondary market research data with continuous intelligence tailored to their internal business needs. And the insights are offered for analysis in visually stunning and intuitive dashboards:

market-intelligence-and-research

But we’re getting ahead of ourselves. Let’s start with the methods used to collect primary research.

Methods in Primary Market Research

Returning to primary market research, let’s see what else it’s about, as it may be defined by what it sets out to accomplish.

For example, sometimes it is designed to investigate a research problem that is not well understood. In this case, it is defined as exploratory research and its purpose is to provide the groundwork for a more exhaustive process. It may also be used to describe an observed phenomenon without the need to understand how or why it happens. This is defined as descriptive research. Thirdly, it may be geared towards the understanding of the relationships between different variables in the market i.e. establishing a cause-and-effect relationship. Then it is referred to as causal research.

In all three levels of primary market research, the data gathered may be quantitative or qualitative depending on the information sought. Quantitative data is characterized by magnitudes: Numbers, volumes, sizes, etc. On the other hand, qualitative data is characterized by attributes: Attitudes, emotions, behaviors, etc. For instance, “50% of consumers are male” – that’s (bolded) quantitative and qualitative data respectively. It tells you there are males in the group (a quality) and their share (a quantity).

Note that the three levels and the two data formats described above pertain to all market research whether it’s primary or secondary. What really defines the context in which they are applied are the methods used. And to primary market research, the following four methods are distinctive:

1. Interview

In this method, the researcher seeks information from the subject through a one-on-one conversation around a particular topic or number of topics. Its strength lies in the amount of information that can be extracted from (and on) the interviewee. However, it is time-consuming as the researcher has to deal with one person at a time. It is best used to collect qualitative data.

2. Survey

In this method, the researcher picks a number of people – referred to as a sample – with at least one common characteristic to represent a larger demographic. The information gathered from them is used to determine the characteristics of the broader demographic. Its strength is in the generalizability of information which translates to cost-effectiveness. However, it lacks depth as the information of one person is used to judge many, which may not always be accurate. It yields quantitative data.

3. Focus group

In this method, the researcher assembles a group of people in a common location for close examination. It augments the proximity and variety features of the interview and survey respectively in order to gain more information more quickly. Its main weakness is the assumption that the subjects are honest or have a perfect understanding of their choices and motivations. It is used to collect both qualitative and quantitative data

4. Direct observation

In this method, the researcher avoids direct contact with the subject and collects information from a distance. Its strength is its objectivity, relying on the actions of the subjects in a free environment rather than what they say in a controlled setting. Its weakness is in the interpretations of the researcher which may be biased and the limited amount of information that can be gathered. It is best for gathering quantitative data but can be applied to qualitative data collection if the subjectivity of the researcher is factored in.

Advantages of Primary Market Research

Businesses conduct primary market research when they want to gather their own data according to their specific needs. Precise targeting is therefore a great advantage of this approach. You are able to select a target population and decide the best way to extract information from it using one or a combination of the methods discussed above.

Primary market research yields highly relevant data because it is customized to your business. Whether you have an internal team doing the work or commissioning an external market research agency, the data is collected in the context of your research problem.

And finally, you get to own the research, from the raw data to the analysis and the intelligence relating to your particular problem. This is a great incentive to conduct primary market research. The results are not only useful at the time but may be usable long into the future.

The greatest discouragement for conducting primary market research is the cost of it. For smaller businesses money is the main issue. But it’s not an easy route for larger organizations either. Primary market research is also time-consuming. This limits its application to the types of information that remain unchanged for long periods. Otherwise, collecting data on problems that are constantly evolving may cost too much yet leave you too little time to apply it.

In light of the advantages and limitations of primary market research, it is important as a brand not to rely on this approach as your only source of truth. Yes, it is customized to your brand and yes you get to keep the data for the future. But also, it is costly and because of this may not penetrate to the deeper levels that would be ideal. With secondary market research, you lack some of the advantages but you also get to make up for the limitations of primary market research.

Primary Market Research In Action

Want to see primary market research in action? Suppose you are designing a fitness app. What are the questions to ask when wanting to move things from an idea to a source of revenue? Let’s run through the motions!

First, you want to know who your customers are. This means you are on the first level of primary market research: Exploratory. Your research question should therefore be framed in a way that the answer will inform you about your target customer. You may ask, “Why do people use fitness apps?” This answers to the potential utility of your product.

How will you gather the information? We are assuming you don’t have an oversized budget and your time is limited. So, the focus group and interview are beyond your reach. Direct observation is not applicable to your situation. This would traditionally leave you with the survey, which today is amplified with immediate online access.

Since you don’t know where your target customer base lies, you will design a survey intended to address random people. With data analytics, you can narrow this down to be much more specific about your design – from where to target consumers:

fitness-blogs

––to what they’re talking about:

fitness-hashtags

You’d want to ask questions concerning age, gender, occupation, location, etc. Or you can sort this out rapidly with NetBase Quid®:

fitness-ages

How you determine your target customer will depend on the numbers you get from your analysis. Meaning, the largest demographic that shows interest in using a fitness app will point to your market entry point.

This is only the first step. Next, you would need to conduct a descriptive study to understand the characteristics of your target market. Later on, once you have some feedback on your app performance, a causal study would take you deeper into the explanation behind the performance. At every step, you would ask questions and gather data that helps you make your product more useful to your customer, and profitable

Whether you want to discover hidden opportunities in your environment, test new product design and service offerings, or mitigate business risks, primary market research is a necessary preliminary process.

In a future article, we will go into more detail on how you can complement your internal research with secondary market research. For now, if you would like to know how we can help you conduct effective market research, reach out for a demo and we will have an expert ready to take you through it!


Premier social media analytics platform

Expand your social platform with LexisNexis news media

Power of social analytics for your entire team

Media analytics and market intelligence platform

Enrich your media analytics with social data

Media coverage for historical & real-time monitoring

Data streams & custom KPIs for advanced data science

AI, Image Analytics, Reporting Tools & more

Out-of-the-box integration with other data sources