Everyone wants to succeed in a business endeavor. Beyond delivering high-quality, meaningful offerings to consumers, companies must continuously improve their products and services by understanding customer needs, wants, pain points, and other sentiments.
Market research can help. It’s a crucial element of any organization’s success because it gives companies a clearer picture of how to produce the best possible offering that consumers value.
Although big-brand organizations can conduct primary research at any time, it might not be a viable idea for small and medium-sized businesses.
Unfortunately, SMEs can’t ignore the value of market research in advancing their strategic objectives. The solution? Secondary research can be as valuable as primary market research if the company knows how to do it.
If you’re struggling with understanding your market and don’t have the budget to conduct primary market research, secondary market research will get you what you need. Here’s everything you need to know about understanding your market better with secondary market research.
An Overview of Market Research and Why Companies Need It
Research requires the systematic and organized study and investigation of sources and materials to establish facts and derive concrete and accurate conclusions. If you’re performing market research, your goal is to draw verifiable and valid conclusions from whatever pertinent data you gather.
Companies perform market research to determine the viability or acceptability of a new offering. Businesses can also conduct either primary or secondary research to understand how customers view them, allowing organizations to connect with customers better and plan a more engaging program for consumers.
Market research is also an effective way of understanding your company’s position in the marketplace, where competition is fierce. You’d want to know what your competitors are doing and how they are building their customer base. Market research gives you the chance to determine and develop a competitive advantage that puts your business on top.
Companies that are unsure of who their customers are and where they’re from can also leverage market research. Organizations can also use market research to determine why some customers wouldn’t want to do business with them.
Coming up with promotional activities and product packaging ideas is also more meaningful if companies can perform market research on these aspects. It can help them formulate and deliver the right marketing message to their consumers.
So, how do companies conduct market research?
You might have experienced receiving a phone call or an email from a company you bought a product from in the past. The person in the line might have asked you about your experience with the item, such as issues you might have had and other concerns. The company representative might even ask you how they can improve the product. This telephone conversation is the most classic example of market research.
Other techniques include focus group discussions, surveys, product testing, and documentary analysis.
Dissecting the Two Types of Market Research
Companies conducting market research have two options – they can perform the activity themselves or obtain the much-needed information from other studies. These choices reflect the two fundamental types of market research: primary and secondary. Let’s look at how these two types stack up against each other.
· Collection of Original Data
Differentiating between primary and secondary research requires understanding the origin of the data for analysis and conclusion generation. It answers the question, how did you obtain the information you processed to arrive at a valid conclusion?
The original data in primary research comes from the company conducting the study. For example, if your organization wants to determine customer sentiments about one of your products, you will want to conduct primary research. You’ll ask your customers through surveys, interviews, focus group discussions, or questionnaires. Some companies would also visit their competitor’s locations.
On the other hand, secondary research consists of already-published or completed studies conducted by individuals, government agencies, companies, organizations, and institutions other than the one needing the research results.
Getting your hand on secondary research materials is easy nowadays. You can perform an internet search or use Google Scholar to look for evidence-based studies related to what your company seeks. Trade journals, magazine articles, and industry publications also make excellent sources for secondary market data.
· Principal Benefits
Most of us think primary research is of better quality than secondary research. Although there’s truth to this statement, it’s not 100% accurate. Research quality depends on many factors, including research design, data gathering instruments, and validity of measures. We’ll discuss these things later.
The principal advantage of primary market research over a secondary type is specificity. Companies can customize the research according to their needs. They can identify the correct population sample to ensure validity and reliability of measures. Market researchers can also exclude variables they deem unnecessary to their goals and institute statistical measures to limit the impact of extraneous factors on the study outcomes.
Research focus is crucial in understanding your business and the marketplace. You’ll want to study only the variables that directly and indirectly impact your company, products, and services.
Meanwhile, the principal advantages of secondary research are speed and affordability. It’s worth remembering that secondary market research focuses on readily-available data. Companies can access the much-needed information for their market research by communicating with people and entities that have these studies.
For example, a company might want to contact a trade organization or industry association for market or industry-related data. They can also look for the correct research information from government agencies., especially if their research has legal or regulatory implications. Organizations can also visit a reference library, read industry publications and trade journals, or read magazine articles.
It’s worth remembering that private companies can also conduct their research. Other organizations can access the privately-owned data depending on the arrangement. Some firms require a fee while asking permission is sufficient for others.
Because the research information is readily available, you can complete your market research faster. You can analyze the data and draw your conclusions sooner than conducting primary market research. There’s also the added benefit of cost-effectiveness. The only cost you’ll incur in conducting secondary research is the fee that some data sources might charge for accessing their research results.
Many marketers consider primary market research costly. Vernon Research says companies spend $15,000 to $50,000 to conduct market research surveys. Although online and telephone surveys can reduce the overall cost, primary market surveys can still dent a business’s budget. It’s not a problem if you have the capital for it. But how about small businesses struggling to stay afloat in the competitive market?
Focus group discussions are also costly. You have a panel of experts exchanging views about a topic, allowing you to synthesize the output into actionable insights.
Unfortunately, a single focus group can cost a company $4,000 to $6,000, depending on the group member composition. Outstanding community and industry members command a high price for their opinions.
Unfortunately, cost isn’t the only thing pulling primary market research down and favoring secondary research. Speed is another issue. Primary research requires a lengthy preparation, such as study objectives determination, population sample definition, research design choice, and statistical data treatment.
Preparation alone can already eat up most of your time. There’s also the conduct of the research, which can be time-consuming, too. And what if some of your target respondents don’t want to participate in the research, what happens to the study’s conclusion validity?
A third issue arises from the primary market research. Unless the company has research-minded guys, it would be better to commission a research company to conduct the study for your organization. This approach can increase the cost, but guarantees more credible results.
Conducting research requires excellent knowledge of research design and methodology, sampling techniques, instrument preparation, and data treatment and management. A mistake in any element can produce unreliable and invalid results, questioning the market research’s credibility. You can still use the outcomes, but it wouldn’t be right to expect stellar results from your company plans.
Although secondary research delivers quick results at minimal costs, it can also suffer from validity issues. Studies show that research results have a validity lifespan – they have expiration dates. Most scholars agree that any study a decade or older is obsolete. For example, if you’re to conduct market research today, the oldest material you can source is 2012 to maintain credibility.
It’s common sense that what we know now might be different tomorrow or next week. That’s how fast change is. Hence, citing research from the 20th-century might no longer be valid because the conditions now are very different from then.
Secondary research also suffers from nonspecificity. Studies might be industry-related, but they might not be representative of a company’s identity or nature. It’s essential to look at organizations as individuals with characteristics or attributes unique from other entities.
Hence, prior research on customer service excellence might seem a perfect fit for a company’s search for improving its customer service. However, the study’s characteristics are different from what the organization has.
Secondary Market Research: An Equally Effective yet More Practical Way to Understand the Market
Primary market research provides companies with a custom-designed scientific study, allowing them to utilize the results to improve their offerings and marketplace standing. Unfortunately, this market research requires earmarking a budget, something small and cash-strapped businesses might not have.
Secondary market research provides small and medium-sized businesses an equally effective yet more practical way to understand the market. Unfortunately, as we’ve pointed out, validity and specificity are two concerns companies must address if they want their secondary research to succeed. Here are some pointers.
· Plan your market research well.
Although planning is crucial in primary market research, it will also serve you well if you prepare your secondary market research activities. It’s essential to determine your objectives and research statements. These elements will guide you in searching for the correct information for your market research.
You might want to identify the variables you want to focus on and create a conceptual framework on how these factors impact each other. For example, let’s say you want to research consumer sentiment about your product. Some of the research variables you might want to consider include quality, price, dimensions, materials, features, and design.
These variables can guide you in looking for related literature. For example, one study might focus on price impact on customer sentiment, while another research might give you insight into product quality attributes.
· Be exhaustive in your data sources.
One advantage of secondary research is you have many potential data sources. The information you seek might be present in your company (internal) or anywhere outside (external). Trade associations, industry organizations, government agencies, specialty groups, private companies, and even competitors are excellent sources of researchable information.
However, it’s always best to start in your backyard. Internal documents, customer communications, reports, and records are excellent internal data sources for market research. Once you’ve exhausted efforts to search for credible information in your organization, you can start looking for additional data outside to boost the market research’s credibility.
It’s also best to focus on quantitative and qualitative data. Quantitative data are measurable and verifiable, and you can see them in reports. On the other hand, qualitative data sources are subjective and challenging to measure. Examples are customer reviews and complaints, audio recordings, video materials, and similar items.
· Choose only the most recent studies and researches.
Although some scientific research (not market research) allows the citation of decades-old sources, it’s best for market researchers to pick only studies as recent as five to ten years. As we pointed out, the circumstances surrounding a particular research study are different from the current situation. It’s worth remembering that times change. A 2010 study result might be relevant in 2015 or 2020 but inappropriate or inapplicable in 2022.
· Use appropriate technology.
Some qualitative data sources (i.e., video interviews, telephone calls, email surveys, etc) require additional processing. For example, transcription service is necessary to convert spoken or verbal data into written or readable information.
Secondary research includes every available data, including written materials, videos, and audio recordings. There’s no issue obtaining researchable information from documents. Unfortunately, validating spoken words in audio and videos is a different matter.
For example, organizations might record events and meetings. These activities are a treasure trove of researchable information. Unfortunately, you cannot append a video or audio into your market research. You can only attach written proof of the source material.
The best way to create documentary evidence of audio and video research data is to transcribe the content. Transcription transforms every spoken word in the research material, making it available for everyone to read. Market researchers can also subject the written data to statistical analysis, lending credibility to the activity.
Primary and Secondary Market Research: The Ideal Combination
Although primary market research has the upper hand in producing company-specific research results, its cost and time limitations make it an unlikely option for many small and medium-sized businesses. Secondary market research fills the void, albeit at the cost of specificity.
However, small and startup companies can still conduct secondary market research to understand their business, the marketplace, and the environment. If the organization cannot find the answer they’re looking for, they can start with small-scale primary market research to address cost issues while helping them achieve their research goals.
It’s worth mentioning that some research questions are more suitable with either primary or secondary market research, but never both.
For example, data on available distribution channels, global expenditures, and primary competitors are obtainable by secondary market research. On the other hand, determining how customers view your product or company requires a primary market research approach.
The Role of Transcription in Market Research
Transcription is vital in market research, whether primary or secondary. If you’re dealing with verbal or spoken data, it’s best to transform it into written information. It’s not easy to analyze and statistically test audio or video data. Transcribing it into readable form can help market researchers make more accurate and valid generalizations.
Although it’s possible to listen to recordings or watch videos multiple times, it’s not practical. There will always be information you might miss because of fatigue. Moreover, ambient noise and other distractions can affect data accuracy.
You’ll never have these issues with an audio or video transcription. You can read along as you review the source material to validate the transcription’s accuracy.
Transcription gives market researchers verifiable evidence they can use to formulate recommendations, allowing the company to make the necessary adjustments in its strategic plans.
Doing market research is crucial for the continuing success of businesses. And if you’re only starting with your company, having a clear idea of your niche and market should help you gain a more substantial foothold.
Primary market research can provide you with a better fit for your company’s objectives. Unfortunately, it’s costly, time-consuming, and incredibly challenging. As a small or medium-sized business owner, your best bet is to conduct secondary research. It should still produce the same valid results if you plan it well, exhaust data sources, be selective, and use the correct technology.
You need a credible transcription service to process video and audio resources into supporting documents, whether from primary or secondary market research. We can help you transcribe these research tools and become instrumental in advancing your business goals.