Should I Perform Primary or Secondary Market Research?
After exploring in details the topics of primary and secondary market research techniques, this article focuses on the comparison of both types of market research. We will first gain 1) an insight into primary and secondary market research, and explore then the benefits and disadvantages of both types of research when choosing to perform 2) primary or secondary market research.
AN INSIGHT INTO PRIMARY AND SECONDARY MARKET RESEARCH
Primary market research is one of the two major market research methods used by most businesses across the world. Primary research is the research that a business does on its own, without the help of any previously collected data or information. The data collected in primary research is being collected for the first time and is specific to the business’s purpose or objective. This is why the information gathered can be referred to as ‘raw data’. Primary market research can be done through many methods of which some include – focus groups, face to face interviews, telephone interviews, surveys, questionnaires and observational techniques, etc.
One of the main benefits of conducting this kind of research is that it helps to gather only the data needed and no extra information. This can be time taking and cost bearing but avoids the need to cut back on several pieces of useless information. Primary market research is of two major types: quantitative and qualitative. Quantitative research focusses more on hard facts, stats and figures whereas qualitative research takes into account the feedback, opinions and emotions of the consumers.
Examples of primary research
- Exit Surveys – Exit surveys are those kinds of surveys which customers are requested to answer before leaving the store or the website and help to gather views on products, services, etc.
- On-site fieldwork – This kind of research is related to gathering information about a particular location for the business, its access to consumers, its popularity, and other such factors. Based on the results, a business decides which location will serve best for its store or functioning.
- Interviews – Face-to-face interviews or telephone interviews help to gather information about the customer’s satisfaction levels, preferences, dislikes, and expectations.
- Focus groups – Groups of 8-20 people are brought together, and a researcher is asked to conduct group discussions to fathom opinions regarding products and services. In such a method, direct feedback from core customers can be collected efficiently.
Secondary market research is a kind of a market research method that involves gathering already researched and collected information. This technique tries to search for and compile information that is already existing and can either be for free or for certain cost. This method of research does not include finding any original or unique data and relies on information obtained through the internet, libraries, government sources, trade associations, existing business documents, competitor’s data, etc.
While it may be very time-saving and cost saving to find information through secondary research, the amount of data gathered may not match the business’s requirements or may not be specific to its needs. Secondary research is however still preferred and widely used across industries and businesses. This method is also termed as ‘desk research’ since it can easily be done from behind a desk, and one doesn’t need to step out for it. Most of the times, secondary research is for free and hence very popular.
Secondary market research can be used to gain an early understanding of the industry or the market. But proper interpretation is needed to understand and evaluate the data collected.
Examples of secondary research
- Data on internet – One of the most preferred and popular sources for collecting secondary data is the internet. The web provides a lot of information which can be used by businesses to meet their research requirements. However, only credible sources and trusted websites must be referred to and used.
- Government data – One can also make use of data recorded and filed by government organizations for their secondary market research. Some data that can be availed through this method includes economic factors, industry trends, company rankings, etc.
- Data on customer databases and demographics – A lot of data is available on customer databases such as stock lists, etc. and this information can prove very valuable for businesses that need to study customer trends, behavior, names, addresses, etc.
- Information through libraries, etc. – Libraries can be a great source for a lot of business related information, marketing tactics, promotional methods, etc.
PRIMARY OR SECONDARY MARKET RESEARCH?
In order to compare which type of market research would fit your business purposes better, we listed the benefits and disadvantages of Primary and Secondary market research below.
Benefits of PRIMARY Market Research
Specific data can be found: One of the most important benefits of primary market research is that it can help find information that is customized according to the needs of the business and is highly specific in nature. The research helps to investigate issues that the business may need to know the most about and is flexible enough to leave out unwanted or useless information. It helps to gauge customer behavior, the consumer likes/dislikes, their expectations and market trends in a specific way. Methods like focus groups, surveys, and interviews, etc. help to gain knowledge that can be directly used for product development, etc.
Customized to personal needs: Unlike secondary market research, the approaches used in primary market research methods can be tailored according to the personal requirements and needs of the business. One has total control over the manner of conducting the research and finding solutions. For example, if a business needs to find out customer behavior in a particular age group, it can do so by conducting surveys for that particular age group.
Targeted issues can be addressed: Only those issues which the business is most interested in addressing can be touched through the method of primary market research. No extra information needs to be collected or goes to waste through this method. The research work is streamlined in such a way that its scope is limited to the business’s interest. The efforts can thus be concentrated on specific matters and not a whole array of other areas. This is another very important benefit of using the method of primary market research as a part of a business’s research efforts.
Ownership of information: Another important advantage of primary market research is that by using this method of gathering information, a business can claim to own exclusive rights over collected data. This means that no one else but that business can use the information, and it may choose to offer it or not offer it to anyone else. The proprietary of information or ownership of information can bring about further benefits for the business.
Better data examination: When it comes to primary market research, the data collected or information gathered can be better interpreted or evaluated by the business. The data can be examined based on the needs, and this doesn’t have to depend upon the interpretation of the secondary data, which is complex and time taking. This means that in primary research, the time taken to evaluate data is less, and the process is more efficient.
Efficient spending: In the case of primary market research, a business spends only on what is required and doesn’t end up wasting money on data that may be useless or irrelevant. This means that a business can spend smartly and efficiently when it chooses to conduct primary market research. This helps to remain within budget and save on the overall costs.
Disadvantages of PRIMARY Market Research
Expensive to conduct: One of the main disadvantages of opting for primary market research is that it can be very expensive to conduct. One may be required to spend or invest huge amounts of money to conduct interviews, surveys, organize focus groups and experiments and trials. Not all businesses can afford to opt for these methods, especially startups or small scale organizations. They may rather opt for secondary methods such as researching for free on the internet, etc.
Time taking: Another negative associated with the process of primary market research is that it can be very time-consuming. Conducting interviews, market surveys, and experiments, etc. may take a long time. Moreover, evaluating the results and applying the obtained results on product development, etc. may take further time. Those businesses that do not have the required time may rather opt for less time taking alternatives like using secondary sources, etc.
Feedbacks may not always be accurate: The feedbacks obtained from audiences and respondents may not always be honest and accurate. Not all respondents may be totally true or honest in giving their opinions and feedback. Some may not state what they feel accurate and this could mean evaluation of incomplete or wrong information. Thus, the entire process of primary market research may topple over or lead to slightly incorrect findings.
Several sources needed: In order to come up with results or final reports, the help or assistance of many different sources may be needed. One may need to rely on several different methods including focus groups, face to face interviews, online surveys, physical surveys and observational tactics, etc. This may be even more time-consuming and expensive. This thus proves as another negatively related to primary market research.
Benefits of SECONDARY Market Research
Easy availability of information: One of the main advantages or benefits of secondary market research is that all the information gathered through it is very easily available and accessible. There are many sources from which information can be taken, and this makes it easy for researchers to gather relevant information. Unlike primary research, in this method, one tends to collect huge amounts of information in lesser amount of time.
Less expensive: As compared to primary market research, secondary market research is cheaper to conduct and hence helps saves a lot of money. It allows businesses to remain within their budget limits and requires spending of the petty amount of money. In fact, most of the information can be found for free through secondary data sources like the web, public directories, governmental organizations, and libraries. This very benefit makes it a popular choice among small or new businesses and organizations.
Lots of available data: Besides the easy and cheap availability of information, secondary market research also offers the benefit of availability to lots of data. There is a gamut of data available for each business, company and industry and several objectives can be fulfilled by making use of such information. The abundance of secondary data sources is responsible for this in addition to the fact that most information these days is stored on web search platforms like Google, Yahoo or Bing, etc.
May highlight truths about conducting primary research: Most of the times, the people who contribute data to secondary market research may point out to the original sources, the time it took to collect the information, the difficulties and challenges faced while gathering data and other information relevant to it. This may help secondary researchers to know whether or not it was practical to conduct primary research in the first place. This very fact makes secondary market research a beneficial process. It highlights the truths about primary research.
Answers research questions: Secondary data research or market research is a method that helps to bring together or align the concentration of widespread primary research. When conducting this form of research work, businesses or researchers often realize that the information they were looking for is actually present for free and this may reduce the need for conducting primary or original research work from scratch.
Lots of free information available: Often, businesses can conduct secondary market research without spending even a single penny. This is because of the availability of high amounts of free data. For some organizations, the entire research can be conducted using this free information, and this would mean zero expenses on market research.
Quicker to conduct: Since most of the data is available easily and can be accessed without many efforts, the process of secondary market research is much easier and convenient to conduct as compared to primary market research. This type of research can be done within days or weeks, depending upon the objectives of the business or the scale of information needed.
Disadvantages of SECONDARY Market Research
Difficult to cut back on useful information/not specific: One of the main drawbacks of secondary market research is the difficulty in selecting some pieces of useful information from the sea of data collected. Since lots of data is available but specifically needed data is less, businesses may have to spend a lot of time and energy in picking out information that is relevant to it. In fact, they may sometimes realize that they haven’t found what they were exactly looking for due to variations in customer demographics, location, and other factors.
Lots of non-credible sources create difficulty/lack of quality research: Of course, there is a lot of secondary data available out there, but not all is offered through credible or trusted sources. Most of the data on the web cannot be trusted, and the same holds true for the information offered by directories, trade associations, etc. Thus secondary market research may not always be quality research as sometimes it is difficult to know which source is credible and which is not.
Incomplete information also available: Besides the lack of credible sources and quality data, most of the information available through secondary sources may be incomplete or lacking on some main points or statistics. As they say, incomplete information can be dangerous; using incomplete data results can also prove dangerous as far as market research goes. Especially when it comes to using competitor data or information on the web, several links can be broken, and the true picture may not be presented.
May not be updated: Not all secondary data sources available offer the latest reports, data, and statistics. Some of the data may be outdated; other may just not be valid according to the current situations like economic climate, market trends, user demographics and other factors. This is a major drawback of using secondary sources for market research. Old and outdated data may lead to incorrect results or findings, and this very fact interferes with product development, service enhancement, and other business processes.
When it comes to choosing primary or secondary market research, no one type of research comes out as a winner. Both the research methods have their positives and negatives, and the decision to choose one depends upon the individual business needs and requirements. Where on one hand, secondary market research presents data which you may never be able to uncover yourself, primary market research can help fill the gaps which secondary research wasn’t able to answer. Neither of the research methods alone could help a business reach its objectives, and the wise thing to do is to pick smartly both options, in the right proportions.
Relying on primary market research alone can lead to missed opportunities, incomplete information, and limited data, using secondary data alone may leave you with vague answers to specific questions. Both research works hold their importance and present beautiful opportunities for businesses when combined well together. A successful business is one that has learned to utilize these processes together and in the right amounts. Thus, it won’t be wrong to say that no method is better than the other, and only the combination of both can give a well-rounded view of the market or the industry.