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Primary Market Research vs. Secondary Market Research: a comparative analysis

Marketing research is an essential part of any business plan, whether a fledgling business or a multinational organisation. Knowing that there is a sustainable market for your product and understanding what your audience expects from you is vital to a successful business launch. Market research can generally be split into two categories; primary and secondary, and during this article I will explain both and discuss their respective merits and appropriate uses.

• Secondary Research

Secondary research makes use of existing data from whatever sources are available. There are government censuses, Mintel surveys, and many private market research agencies that allow access to their data; some of it for free. It can be hugely advantageous, especially as a place to begin. Secondary research more often than not, proves to be a solid base on which to develop your own primary research. It plays the same role as research in general does to your product launch, and should be seen as just as vital. Also, this is of course far cheaper and generally quicker than creating your own research from scratch.

The negatives

The other side of that coin is that you have neither picked the panel to suit your exact needs, nor the questions. It is feasible that you can find some research somewhere that corresponds to what you are trying to achieve but it will almost certainly require some tweaking, and will not necessarily be the people you wish to interrogate; the use of qualitative research designed by someone else will almost certainly make the target specialised away from your goals. Another main issue with secondary research is that by the time it reaches you it’s often outdated; markets change so quickly in business that the only way to be truly current is through new research. This is not to rubbish the quality of secondary research.

• Primary Research

Primary research is, essentially, the creation of your own research, whether a question that you ask to your friends and family or a survey put together alongside and agency and administered to a wide panel. Primary research will instantly let you feel more in control of your project; and that is the exact position you will find yourself in. You choose the questions and select your panel through qualitative research, allowing you detailed responses from individuals. You decide how, when and where your research is administered. You can ensure that your research is focussed: the number of participants and their backgrounds, the number and nature of the questions, the amount of time that your survey is available. This is the most accurate way to research a market sector that is specific to you and your product.

The down side

It is of course, more expensive, whether financially or on your time. If performing primary research alone it will take a lot of time, refining and will need some experience in producing quality questionnaires. It will also take time for your questionnaire to be completed if you don’t have direct access to a ready panel. Most of this can be avoided by using an agency, but at a cost higher than performing your research alone.

So what’s the best option?

Neither type of research will take you to your goal alone; however, a combination of the two will give you all the information you need. Using primary research alone, without first seeing what has or has not worked for other companies and possibly missing out on important data from research that you couldn’t afford to perform yourself, is likely to lead to irrelevant questions or missed opportunities. At the same time, relying solely on secondary research is likely to leave you with answers that are vague or inappropriate to your specific audience. The two compliment each other well, and when used in conjunction will give you a well rounded and accurate portrayal of the needs and opinions of your market sector.

Online Market Research: DIY or use an agency?

For a business that needs to gain a general view from a large cross-section of the population, and in as short a time as possible, there is no doubt that online research offers a viable benefit. This affordable way to test one’s target market is ideal for new business start-ups and can play a vital role in obtaining financial support for your company.

Do It Yourself or with an agency?

The DIY method will allow you to carry out quantitative online market research (surveys) for little cost. It is definitely a method to consider when it comes to researching one’s market but it is also important to know how it differs from agency solutions. Here are some differences:

• The agency would provide you with access to a precise and qualitative panel, ensuring you of a sample of your target market. Unless you already have your own database, it will be hard to reach such a relevant and representative panel through forums, family and friends. Moreover, with DIY surveys, the client puts the questions directly to the respondent so it compromises the objectivity of questioning and the impartiality of interpretation.

• Using the DIY method, for example writing the questionnaire, marketing it to find your respondents and analysing the results to make your report, will eat up a lot of your valuable time whereas using an agency will result in everything being catered for, from A to Z.

In addition, the market research agency will give you its expert opinion on the order and the formulation of the questions.

• The DIY method will provide you with a basic layout which is not always user-friendly and not always easy to use for the respondents. On the other side, the agency can customize the layout (using templates, videos, images and audio) for a more efficient, richer interrogative experience.
• The agency service allows for a very rapid turnaround – research can be undertaken and results received within a few days whereas it can take far longer using the DIY method, especially if you’re having difficulties reaching and interesting people in your survey.
• As previously stated in this article, the DIY method is not as expensive. However, for something so important to your business plan, doing online market research with an agency is cheaper than you think, with hundreds of responses costing less than a thousand pound.

Quantitative market research (Primary research) for a more valuable business plan

The current economic climate is having an impact on businesses large and small.  What is clear is that the uncertainty means that researching a business’ market has never been more important.

Market research determines the feasibility of a project and it’s a way to adapt a business’ strategy (communication, pricing policy, products range…).

A good and precise market research will professionalize your setup approach and will give more value to your business plan. Doing quantitative market research is a solution to add a personal touch to your market research as you are testing “your” precise target market about “your” precise project.

It will make your project even more credible and it will help you to convince financial partners and others.

 

It’s an essential stage in the business start-up process but many entrepreneurs don’t do it – not least because of the supposed cost. As a result, many entrepreneurs only request feedback on their project from their family circle for their primary research which will of course, give them some positive return. Producing your quantitative research alongside an agency is a far more objective solution and is at last affordable to those with a small budget thanks to the online method.

It is important to carry out market research in order to:

• · to confirm an idea
• · to make a project credible
• · to professionalize the setting-up approach
• · to convince financial partners and others

Online market research has grown rapidly in recent years as a key form of data collection for primary research activities. It offers both large and small research focussed organisations the chance to eliminate the costs involved with face-to-face, postal and telephone data collection. Organisations have also begun to realise the speed and reliability of the data that the internet offers.

There are a number of benefits to commissioning online research, including:

• · Easier targeting of respondents across numerous segmentation variables. Provides access to a precise and qualitative panel which ensures to gather reliable data on sensitive issues.

• · Multi-country projects no longer need to be an obstacle to research – worldwide research can be conducted at the click of a button.

• · An inexpensive way to conduct large research projects – it is possible to get hundreds of responses for less than a thousand pound.

• · Most large research suppliers have access panels which provide an easily accessible, reliable respondent base which can respond promptly to online questionnaires.

• · It allows for a very rapid turnaround – research can be undertaken and results received within a few days as opposed to several weeks involved with face-to-face and postal data collection methods.

• · Use video, images, audio for richer questionnaire environments.

For a business which needs to gain a general view from a large cross-section of the population, and in as short a time as possible, there is no doubt that online research offers a viable benefit.

Marketest – Online Market Research or how to properly start a business

The current economic climate is having an impact on businesses large and small.  Many are suffering while others are discovering new opportunities. Several people who lost their job think about launching their own business.

What is clear is that the uncertainty means that researching a business’ market has never been more important.