Module 2, Video 3: Formal Research: Advantages and

Disadvantages (Part One) Transcript

Welcome to unit two, video three, Formal Research, Advantages and Disadvantages. In this video, we'll discuss
formal market research in more detail. We'll talk about the advantages and disadvantages. We'll also look at the
three basic parts of a new product survey and discuss sample question structure.

Remember in unit two, video one, we discussed two formal methods of doing market research, surveys, and focus
groups. In this course, we'll only have time to discuss and practice using surveys. Not surprisingly, the advantages
and disadvantages of formal research are the opposite of informal research.

Let's first look at the advantages.

Formal research can produce more quantitative data. Surveys generally provide more quantitative data than a
focus group. But surveys also can ask for some qualitative information. Formal research is also more likely to be
objective. Consequently, potential investors are more likely to be persuaded by the results.

Like informal research, formal research also has some serious disadvantages. First, it can be difficult to find
respondents. Researchers want objective data and therefore do not want to use people they know. This requires
more time in planning.

Second, formal research can be expensive in several ways. It takes more time to administer a formal survey, and all
respondents are given the same full survey. If entrepreneurs want to complete the research quickly, they often
have to pay for help. Formal research usually requires a professional looking prototype or visual aide to accompany
the survey. This adds to costs and requires more planning. A larger, more expensive investment proposal may
require using a marketing research firm to provide more persuasive, objective, and quantitative data. This adds a
lot to cost. It also requires more planning.

© 2022 by FHI 360 M2 T3 Formal Research: Advantages and Disadvantages (Part One) Transcript for the
Online Professional English Network (OPEN), sponsored by the U.S. Department of State with funding
provided by the U.S. government and administered by FHI 360. This work is an adaptation Formal Research:
Advantages and Disadvantages (Part One) University of Pennsylvania licensed under the Creative Commons
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