How to Perform an Insightful Secondary Market Research
In this article, we discover the topic of secondary market research. We start with 1) an introduction to the secondary market research, and 2) how to conduct an insightful secondary market research, and conclude with 3) tips to conduct secondary market research effectively.
SECONDARY MARKET RESEARCH: AN INTRODUCTION
Secondary market research is a kind of a market research method that involves collecting information or data from secondary sources. This means that in such a method of research, a business collects and uses information that has previously been collected by some other person or entity. There is a wealth of suitable information out there, and businesses can save their time and money by using this data rather than going the distance to find their own. However convenient secondary research might seem, one cannot deny the importance of primary market research as well.
In the case of secondary market research, the internet may seem like the most obvious source to gather data but besides it, there are numerous other sources including libraries, competitor’s data, colleges and universities, government data, trade publications, competitor’s data and media sources, etc. A business can gather data from as many sources as possible and can then compile and analyze it to come to conclusion or understanding of the market and its trends. To know more about secondary market research, you can read the following given information.
Points to be considered while collecting information from secondary sources
One must consider the following given three points while collecting data from secondary sources:
- The time spent, and expenses incurred to collect data
It might seem easy, convenient and cheap to collect information through secondary sources, but sometimes it may be very time-consuming and expensive to do so since some sources demand money to offer information. Every business must thus take into consideration the time spent as well as the expenses that will be incurred by gathering secondary market data. They must compare it with the time and cost of using primary market research method to do the same and then pick the option that seems better.
- Credibility of source
Not all secondary sources may provide you with accurate, credible and complete information. Thus as a business it is your responsibility to consider and check for the credibility of the source and accuracy of the data.
- Specific nature of data
One must make sure that the data or information they are collecting is suitable in terms of requirements and answers the issues which the business needs to address. It is pointless to spend money, time and efforts on information that may not prove useful eventually.
Advantages of secondary market research
The following are some of the main advantages and benefits of secondary market research:
- Very good basis for effective primary market research -When a business collects data from a secondary source, then this may help it to know about the effectiveness and suitability of primary market research. When this form of research is done, then the business can easily form a hypothesis and fathom the efforts as well as the money required to conduct primary research work. Moreover, when secondary research is complete, a business gains a view about what issues are still left, and these can be covered by their surveys or other forms of primary research.
- Extensive range of data can be collected – Information that is collected from secondary sources like the internet, government sources, libraries, etc. is very extensive and may help to cover many issues. This data can then be cut short, and only the useful parts can be filtered out.
- Highly cost and time effective – On comparing with primary market research, secondary market research proves to be very time and cost effective. This is because it helps to obtain the large spectrum of information in a shorter span of time and for a lesser cost than primary research. In fact, in most cases, data is available for free.
HOW TO CONDUCT AN INSIGHTFUL SECONDARY MARKET RESEARCH
In order to find out specific, highly accurate and useful research results, it is important to conduct secondary market research carefully and in a well-planned manner. There is a gamut of information available on the web, in print and on electronic database systems. This information can be used as the commencement point for research. Follow the given steps to conduct a thorough and insightful secondary research.
Step 1: What question do you want to research and answer?
The first step of the process involves asking yourself what exactly you are looking for and what kinds of questions you wish to answer from the results obtained. Also, you need to figure out who might have previously published data that could answer your questions or address your issues. Once you have a clear idea of your objectives, you will find it easier to tread on the path of secondary research.
There are many more questions that you will need to ask yourself before you set out looking for data. These questions are:
- Do you wish to know about your competitors as well as the products they are offering?
- Do you wish to know about the market in general or your target audience specifically?
- Do you wish to find out if your personal business conditions will play a role in the research work?
- Do you wish to take into account the preferences of the consumers?
These are important questions that every business must take into account in order to successfully conduct and complete the secondary research. Now you might also need to consider the sources that might have the information you need. When you know the sources, the search process will become much easier. Some examples of commonly used secondary market research sources are trade publications, government sources, the web, media sources, private research firms and previously compiled company data, etc.
Step 2: What information do you need to answer the question?
Now that you have asked yourself important questions and figured out the kinds of issues you need to address as a business, the next step is to figure out the exact type of information that can address these issues. You must now have a clear idea about data type that will satisfy your purpose. While some businesses need annual reports, financial reports, and other statistical data to complete their research, others might need local information, consumer information, industry survey reports, etc. You too must chart out the various types of data your business requires to go ahead with your operations or product launch, etc.
Step 3: Where can you find the required information?
Now that you know the exact kind of data you need, you must try to find out the sources that can actually provide you with suitable information. You must start by thinking that the source is likely to provide you with the most relevant information for you requirement. For example, your previous balance sheets and company data may help you figure out past record or monitor your performance whereas government sources are known for publishing information related to business conditions and so on. Thus take the time to evaluate which source to turn to and which to leave. The following is some more information on the various sources available:
Internal sources are the kinds of sources of secondary market research which provide data that has been previously collected or gathered by a business as a part of research. The information of the internal sources is filed in the database of the business or company so that it can be used for future reference purpose. This information is highly valued since based on it; most businesses can evaluate market trends, their capacity, and capabilities etc. The following are some examples of internal sources:
- Balance sheets – Most businesses collect and file all their balance sheets because these documents can help establish trends, figure out stats and offer insights for future projects.
- Profit and loss statements – These financial statements to act as internal sources and can be referred to for future projects and to study earning trends.
- Inventory records – Inventory records can be studied as an internal market research method in order to figure out the life of products in inventory and other similar statistics.
- Sales figures – Copies of invoices and sales figures can be compared with records of marketing data to evaluate the effectiveness and fathom ideas for future campaigning.
Internal sources of data must always act as the first line of research for businesses since they give out a lot of useful data in the cheapest, easiest and least time-consuming way. Moreover, internal data is exclusive to the business, and no other rival company can benefit from it.
External sources are those kinds of market research sources which consist of data that is collected by people or entities outside the business’s environment. Unlike internal sources, external sources do not consist of any personal or exclusive data. This source can be used if data collected from internal sources does not prove to be sufficient. There are many kinds of external sources, and there is endless data that can be collected from them. One must exercise a restricted and controlled approach when it comes to using external sources, to avoid collecting a large amount of useless data. The following are some of the main external sources available:
- Journals and Magazines – One of the most common external secondary market research sources includes journals and magazines. The information collected from the press or media sources is an amalgamation of new products, trends of the market and projections for the future. But since there is an infinite amount of such journals and magazines, one must make it a point to go through only highly relevant ones. Only trusted, well reputed and credible journals must be referred to for finding business related information to avoid wasting time and efforts.
- Trade associations – As far as industry related information or useful statistics are concerned, trade associations can be a great secondary market external source. Not only do these associations provide contact names but also help to scan through business reports and findings from all over the world. This source provides a wide array of useful information that can be compiled, evaluated and then utilized for specific business needs or purposes. Trade associations publish not only relevant stories but also research guides, reports, articles and news pieces, etc.
- Industry and market data – Market reports, as well as industry surveys, are also an excellent secondary market research since they are capable of providing large amounts of data on the market. But one must know that finding a survey or report that exactly suits your requirement could be challenging, given the large number of such surveys present. Moreover, survey reports and results are specific to the region, demographics and products and hence finding one that matches completely could take time. Industry and market reports help to avoid the need to conduct your surveys or industry analysis through primary research methods. This research method can also help to save costs, time as well as effort as compared to primary market research.
- Company and competitor information – Another way to use external sources as a method for secondary market research is to utilize data compiled and collected about competitors or rivals. Most businesses collect and file data like annual reports, directories, rankings, etc. so that it can be used for their future purposes. This data can also be used or bought by rival companies for their research purposes. The following are a few examples of such data:
- Directories – Directories are those sources that offer physical information such as phone numbers, addresses, names of executives, trade names, product details, etc.
- Annual reports – Businesses publish their annual reports such as financial statements, press releases, prospectuses, etc. these can also be used as an external secondary market research information.
- Rankings – Businesses can use the ranking details of other companies for comparative or evaluation purposes.
- Share of market – This data includes information about numerous consumer goods and brands and the share the business has in the market.
- Demographics/consumer data – All businesses make a file of or collect information about consumers and demographic data. Such data files can also come into use of other business organizations for their research purposes. While, in most cases, consumer data may be available for free, in some situations, an entity might demand money for its usage. The following are some of the categories that can be included in this kind of data:
- Government data – Most governments publish data and information about markets, trends, growth rates, labor, economic factors, consumer behavior and other such matters that may prove to be of a lot of use for businesses.
- Other sources – Some of the other such sources include news reports, marketing data, country statistics, etc.
TIPS TO CONDUCT SECONDARY MARKET RESEARCH EFFECTIVELY
When you start conducting your secondary market research you have to understand the limitations and boundaries of the research, analyzing the public point of view, as well as select carefully the sources. Here are the details:
- Understand the boundaries of researching – One of the first tips that one can follow to conduct a secondary market research effectively and efficiently is to understand and follow the limits and boundaries of researching. Secondary market research has several branches and sub-branches that lead to a plethora of data and array of information, but it is important to draw a line and conduct research in a controlled way.
- Understand public perceptions by reviewing magazines and newspapers – Besides using the internet or government data, it is a good idea to read and review magazines and newspaper articles to understand the perceptions and preferences of the public. Media has a huge impact on how the public thinks and as a business organization, you must tap this point to benefit your research.
- Go for credible mainstream sources – Another important tip is to go only to credible and mainstream sources like government sites, trusted websites and public databases. Avoid wasting time on research that is not backed by proof and trust. Moreover, it is best to avoid trusting information on independent web pages as it may be incomplete or wrong.
- Start by simple online search – It is best to start your research by entering the topic on Google, Bing or Yahoo Search. Check the type of resources that come up and mark a few useful links and pages that are credible. This will give you a good start and may help you determine what to do next.
- Look inwards – Rather than starting with external sources for research, you must first look inwards, collect internal source data and evaluate it. Only if you are falling short of more information should you opt for other methods of research. In most cases, internal sources may fulfill your requirement and may provide information that applies to your current objectives as well.
- Avoid buying secondary market research – In most cases, you will be able to conduct secondary market research without paying a price for it. Thus, avoid dishing out your credit card without looking for free and credible information. This is a good way to save money for your business and utilize it elsewhere.
Welcome to the 24th episode of our podcast with Clint Oram from SugarCRM! You can download the …