Market research explores consumer behaviour, as well as the ways cultural, societal, economic and personal factors that influence that behaviour.
Secondary market research investigates consumer information others have gathered, while primary research studies consumers directly. This article focuses on secondary research: what it is and the ways you can collect data.
Unlike primary market research, which collects original information about the products and services you plan to offer, secondary research gathers and analyzes published data. More specifically, secondary research allows you to draw conclusions from data and public records available through libraries, universities, industry associations and government departments. These data sources may include, but are not limited to
- statistical data
- market profiles
- research studies
- industry content
- company records
- analytical papers
- existing sales data on your business
- reports industry and economic trends
Secondary research exploits these resources and applies the information to answer one or more questions. Common research questions include, but are not limited to, the following:
- Who are your customers? How can you reach them?
- What do your customers buy? What products or services do they need or want?
- What needs do you perceive in the target market? Does your product or service address them?
- What are you presently doing? What could you do?
- What factors do consumers consider when making a purchase?
- What will make consumers buy from you?
- What do consumers like or dislike about your current products and services? Where could you improve?
- Is your pricing fair and competitive? What’s a fair price?
- Who are your competitors? How do they operate?
- What are your competitors’ strengths and weaknesses?
The value of secondary market research
Relying solely on your intuition and instinct is not enough. To succeed in today’s highly competitive marketplace, you need a deep understanding of your customers, your products and services, and the market in which you operate. This is where secondary market research becomes invaluable. Not only can it help you establish benchmarks and identify market segments, but it is also particularly useful in competitor analysis.
Know your competitors
Determine which industry you’re pursuing, then identify competitors whose products or services overlap with yours. Use high-level industry terms (e.g., education, construction, food services, hospitality, financial services) to create a list of companies that also operate in this sector. You can then build your list by
- obtaining market reports
- searching social media to develop company directories
- using search engines to find additional industry terms that describe your business
- determining which companies are contenders, leaders, high performers or niche in their respective sectors
When looking at comparable businesses, consider
- companies of relative size
- startup companies or relatively new businesses
- companies operating in the same geographic area
- companies with a similar ownership structure (i.e., sole proprietorship, partnership, corporation or cooperative)
Your secondary research will help you determine not only how well your business might do, but also how to integrate into the marketplace.
Once you’ve amassed data and compiled detailed notes, look for common themes and develop a list of action items. Use the following outline to help you summarize your findings.
Briefly list your goals and explain your reasons for conducting this market research.
Describe the people (e.g., your employees, existing customers, prospects) with whom you had conversations.
- Executive summary
Provide a high-level overview of your key findings. What are the most interesting things you learned? What do you plan to do with this information?
Describe what you learned about consumers’ motivations. What cultural, societal, economic, personal and other factors influence their buying decisions?
Describe the main themes you identified when analyzing your findings. You can go into more detail about consumers’ purchase motivations.
Detail how purchase decisions are really List key influencers, as well as popular product features consumers want.
- Action plan
Identify any areas of weakness. Set your priorities and create a timeline. Your timeline should list specific, measurable and reasonable goals. Your action plan could also include a marketing strategy and a risk analysis. Describe the potential benefit and impact of each action, as well as the risks associated with inaction.
Which came first, the chicken or the egg?
There’s no set order when it comes to collecting data, but you may find it more helpful to do primary research after you’ve done secondary research. In other words, before undertaking your own research about products and services you plan to offer, look at published data. Conducting secondary research first can provide you with the background information necessary to create a more focused primary research project: the more focused your data, the more valuable it is.
Market research: not just for market researchers
Because market research covers a broad range of activities, you may assume that it’s complicated, time consuming and costly. Not true! You can conduct market research regardless of your experience, the amount of time you have available and your research budget.
Whether a simple survey or an in-depth analysis by a hired market research firm, the complexity of your market research project is entirely up to you. The good news is that advice is available. Trust Lift Legal to help you position your business for success.
Contact us today to learn more about our legal services for corporate and business matters.