How does a business find out what customers want, and what is the difference between primary and secondary research?
Explain what market research is, the difference between primary and secondary research, and simple methods such as surveys and observation
A simple guide to market research. What it is, primary versus secondary research, simple methods like surveys and observation, and why it matters, with Singapore examples.
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What this dot point is asking
You need to explain what market research is, the difference between primary and secondary research, and simple methods such as surveys and observation. Market research is finding out information about customers and the market so a business can make good decisions. Keep your answer practical and tied to a real business such as a cafe or shop, and be ready to give a clear example of both primary and secondary research.
The answer
What market research is
Market research is finding out information about what customers want and about the market, so a business can make good decisions. Instead of guessing, the business gathers facts about its customers, its competitors, and what is popular, and uses them to decide what to sell and how.
Primary research
Primary research is new information the business collects itself, first-hand. The business goes out and gathers it directly. Simple primary methods include:
- Surveys - asking people questions with a short questionnaire.
- Observation - watching what customers do and what sells well.
- Interviews - talking to customers about what they want.
- Taste tests or trials - letting customers try a product and give feedback.
Primary research is up to date and exactly about your business, but it takes time and effort to collect.
Secondary research
Secondary research uses information that already exists, collected by someone else. The business looks it up rather than collecting it. Simple secondary sources include:
- Reports and articles about the industry.
- Websites with facts about customers or trends.
- Newspapers and magazines.
- Online reviews of similar businesses.
Secondary research is quicker and cheaper to get, but it is not always exactly about your business and may be out of date.
The difference in one line
Primary research is new data you collect yourself; secondary research is existing data someone else already collected.
Why market research matters
Market research matters because it helps a business:
- Stock or make what customers actually want.
- Set the right price and place.
- Avoid wasting money on products that will not sell.
- Spot what competitors are doing and what is popular.
Good decisions come from facts, not guesses, which is why even a small business should do some research.
Examples in context
Example 1. A bubble-tea shop testing a new flavour. Before adding a flavour, the shop hands out small free samples and asks customers to rate them (primary research, a taste test), and reads online posts about trending flavours (secondary research). Using both, it launches the flavour customers liked most, reducing the risk of a flop.
Example 2. A clothing shop deciding what to stock. The shop surveys its customers about the styles and sizes they want (primary), and reads a retail trends article online (secondary). It then orders more of the popular styles and fewer of the slow ones. Research means it stocks what customers want and wastes less money on unsold clothes.
Try this
Cue. State what market research is, and describe two simple methods a cafe could use. Remember research is finding out about customers and the market, then pick real methods such as a survey and observation.
Cue. Explain the difference between primary and secondary research, with an example of each. Remember primary is new data you collect yourself and secondary is existing data others collected, then give one realistic example of each.
Cue. Explain why market research helps a shop decide what to stock. Link gathering facts about customers to stocking what they want, setting fair prices, and avoiding money wasted on products that will not sell.
Exam-style practice questions
Practice questions written in the style of SEAB exam questions on this dot point, with worked answer explainers. The year tag is the paper they imitate, not the source.
Original4 marksA new cafe wants to know what customers want before it opens. (a) State what is meant by market research. (b) Describe two simple methods of market research the cafe could use.Show worked answer →
(a) Market research is finding out information about what customers want and about the market, to help a business make good decisions.
(b) Two methods: a survey - asking people questions with a short questionnaire about what drinks and food they would like; and observation - watching nearby cafes to see what sells well and how busy they are. A taste test or talking to customers is also accepted.
What markers reward: a correct meaning of market research (finding out about customers and the market), and two real, simple methods the cafe could actually use (survey, observation, taste test, interview).
Original5 marks(a) Explain the difference between primary research and secondary research. (b) Give one example of each that a small shop could use, and explain why market research helps the shop.Show worked answer →
(a) Primary research is new information the business collects itself, first-hand, such as by surveys or observation. Secondary research uses information that already exists, collected by someone else, such as reports, websites, or newspapers.
(b) Primary example: the shop runs its own survey asking customers what products they want. Secondary example: the shop reads an online report or article about what is popular in retail. Market research helps because it lets the shop stock what customers actually want, set fair prices, and avoid wasting money on products that will not sell.
What markers reward: a clear primary-versus-secondary difference (collect new yourself vs use existing data), a correct example of each, and a reason research helps (better decisions, less waste, products customers want).
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