Study notes

Marketing Research - Limitations and Constraints

Accurate, up-to-date information obtained by marketing research can be of enormous value to a business in gaining and/or maintaining its competitive edge. However, there are a number of reasons why, in reality, these potential benefits may not be realised.

Budgetary constraints

Gathering and processing data can be very expensive. Many organisations may lack the expertise to conduct extensive surveys to gather primary data, whatever the potential benefits, and also lack the funds to pay specialist market research agencies to gather such data for them. In these cases, organisations may be forced to rely on data that is less than ‘perfect’ but that can be accessed more cheaply, e.g., from secondary sources

Time constraints

Organisations are often forced to balance the need to build up as detailed a picture as possible regarding customer needs etc. against the desire to make decisions as quickly as possible, in order to maintain or improve their position in the market

Reliability of the data

The value of any research findings depend critically on the accuracy of the data collected. Data quality can be compromised via a number of potential routes, e.g., leading questions, unrepresentative samples, biased interviewers etc. Efforts to ensure that data is accurate, samples are representative and interviewers are objective will all add to the costs of the research but such costs are necessary if poor decisions and expensive mistakes are to be avoided.

Legal & ethical constraints

the Data Protection Act (1998) is a good example of a law that has a number of implications for market researchers collecting and holding personal data. For instance, researchers must ensure that the data they obtain is kept secure, is only used for lawful purposes and is only kept for as long as it is necessary. It must be made clear as to why data is being collected and the consent of participants must be obtained. In addition to this, there are a number of guidelines, laid down by such organisations as the Market Research Society, that, although not legally binding, encourage organisations to behave ethically when dealing with members of the public.

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