Read this article to learn about Data Collection for Demand Forecasting!
A researcher needs to collect different types of data for different purposes.
There are mainly two types of data, as shown in Figure-4:
Following points explain the primary and secondary types of data:
i. Primary Data:
Refers to the data that does not have any prior existence and collected directly from the respondents. It is considered very reliable in comparison to all other forms of data. However, its reliability may come under scrutiny for various reasons. For example, the researcher may be biased while collecting data, the respondents may not feel comfortable to answer the questions, and the researcher may influence the respondents.
In all these scenarios, primary data would not be very dependable. Therefore, primary data collection should be done with utmost caution and prudence. Primary data helps the researchers in understanding the real situation of a problem. It presents the current scenario in front of the researchers; therefore, it is more effective in taking the business decisions.
ii. Secondary Data:
Refers to the data that is collected in the past, but can be utilized in the present scenario/research work. The collection of secondary data requires less time in comparison to primary data.
Methods of Primary Data Collection:
There are various methods of data collection and selecting a correct method is very important to get the reliable data.
Figure-5 shows various methods of primary data collection:
Let us learn about the methods of primary data collection in detail.
Observation method is a method in which the population of interest is observed to find out relevant facts and figures. Observing a person is an art because it requires special skills to study the behavior of a person. The way a common person observes something is entirely different from the way a researcher observes things.
A common person observes something just for the sake of interest; whereas, a researcher observes things for a particular reason. The researcher not only notes how the things are happening; however study in deep why they happen. If he/she is analyzing a situation; then the researcher would take into consideration the behavior of individuals in that situation, the reason for their behavior, and the impact of their behavior on other individuals and society.
For example a researcher observes that in a retail showroom some people are buying products while some people are not buying anything. In this case, he/she would try to find out the reasons behind why and how some people buy products and why some people do not buy anything. The researcher would also observe the behavior of shopkeeper with people.
Observation method is divided into various sub-methods, as shown in Figure-6:
Following points explain the sub-methods of observation method:
i. Natural Method:
Refers to the method in which the researcher observes the behavior of people without any intervention. For example, the researcher observes the bikes passing from the road to study the most popular brand in the city. In addition, the researcher can observe the activities, movements, gestures, and facial expressions of people.
ii. Contrived Method:
Refers to the method in which the researcher takes the information from the people in an indirect way. For example, a researcher approaches different shopkeepers as a customer to buy some products. In this way, the researcher observes how different shopkeepers treat their customers.
iii. Direct Method:
Refers to the method in which the researcher waits for a particular experiment or behavior to occur. This process takes a longer time to get a single response. For example, a researcher is observing the sale of new Products in an automobile showroom. In this case, the researcher has to wait till tire time a customer comes in the showroom and asks for the new product.
When a customer comes and sees the new product, he/she may or may not purchase it on the same day. In such a situation, the researcher has to wait till that customer comes back to buy the product and the other customers come for the same purpose. Even if the first customer buys the product, the researcher has to wait for other customers because nothing can be concluded by observing one customer.
iv. Indirect Method:
Refers to the method in which the researcher observes the behaviors that have occurred in the past. This method consumes less time and cost as compared to other methods. Let us understand the application of indirect method with the help of an example. A researcher needs to know the sale of a particular brand in a store. In tins case, the data can be collected from the registers showing the sale of different products in the store.
v. Structured Method:
Refers to the method in which the researcher knows what is to be observed. For example if a researcher has to know about a particular brand of car, he/she would observe only that brand of car and does not pay any attention to other brands of cars. The structured method consumes less time and makes it easier for the researcher to analyze data.
vi. Unstructured Method:
Refers to the method in which the researcher does not know what exactly he/she has to observe. The unstructured method is used in exploratory research. In this method, the researcher wants to search f affect a particular problem in detail. For example, the researcher observes the buying behavior of people for different brands of the same product. He/she would study all the factors that can affect the buying decision of people. After that, he/she would analyze the buying decision for a particular brand.
vii. Mechanical Method:
Refers to a method in which the researcher uses some devices to observe people’s response. Examples of these devices are video cameras and audiometers.
Methods of Secondary Data Collection:
The different methods of secondary data collection are shown in Figure-9:
Following points explain the different methods of secondary data collection:
i. Company records:
Provide the information in the form of balance sheets and sales records. This information is used to perform a trend analysis of data and forecast the overall growth of a company in future. It also helps in deciding whether the company is moving on the right track to achieve its vision or not. Company records are maintained every year by the company itself.
Given the information regarding the previous researches done on the same topic. The Internet also provides lots of the data related to the research from different sources.
iii. Print media:
Offers you the information that is publicized. Print media includes newspapers, magazine, books, research papers, and journals. The data collected from print media is get an overview of the present market situation and experts opinions on different topics.
iv. Census and other government records:
Furnish a large data of each and every individual of the state. This data contains the personal information of respondents. It is used mostly used by government and big organizations. This type of data helps in conducting research on a big scale. For example, how many parts of the country still not have electricity?