Secondary market research supports businesses to collate existing information and data
about the market they operate within to support decision making and the growth of the business.
This video explores the common methods of secondary market research which are used by
businesses and a comparison of the key advantages
versus disadvantages of using secondary market research in business.
When conducting market research, businesses have two main options
known as primary and secondary market research. Primary market research which is also known as
field research is typically designed and conducted by the business itself with the
aim of collecting brand new data and information based on the business.
In contrast, secondary market research is commonly known as desk research
as it is based on collecting existing data and information which is already available either
internally such as the business’ sales reports or externally such as information on the internet.
Internet research, market reports, government reports, and internal sources are all commonly
used methods of secondary market research in business, let’s explore these in more detail.
Just google it, a phrase I’m sure we all heard at one point.
But it’s true, a quick google search can provide a researcher with a wealth of information.
However, knowing which sites are trustworthy and reliable is a conversation for another day.
Conducting research on the internet can really support a business to gain insights into
specific areas such as the industry they operate within or the activities of their competitors
to help them to make informed decisions. The phrase internet research doesn’t just relate
to a quick Google search, it actually encompasses a wide range of sources which include information
and data found in: online news articles, on YouTube or social media sites such a Facebook,
Instagram and Twitter, and even scoping out a competitors via their website.
When analysing competitors through internet research, it’s likely a business will
investigate a whole range of information and data such as their product range,
pricing strategies, and any promotions they are currently running just to name few.
All of which can be accessed via the internet and social media
to give the business a competitive advantage and insight into the strategy of their competitors.
The use of internet research to collect data and information is usually free of charge,
very quick, and relatively easy to access, which is a huge benefit to businesses.
However, as discussed earlier, there is a wealth of misinformation or fake news on the internet,
so it’s vitally important that the person conducting the internet research on behalf
of the business is aware of this and has the competence to filter out the unreliable sites
to ensure the data and information is valid, reliable and trustworthy.
Another useful method of secondary market research is market reports,
which are usually specific to the industry which the business operates within,
providing the business with a wealth of information and data.
The typical information and data that can be found in market reports include relevant and up to date
information about the trends, businesses, and behaviour of consumers in a specific industry
which can be used by a business for many reasons including identifying opportunities in the market
or analysing their product portfolio against the current trends and behaviour
of consumers identified in the market report. Market reports are available in many formats,
some can be accessed free of charge and some require the business to pay for access.
However, it’s important to be aware that whilst there are many reputable organisations such
as Mintel who produce vast quantities of market reports, anyone or any organisation
can essentially produce a market report. Therefore, it is important for the businesses
to be aware of potential bias or mistakes by the individual or organisation
who produced the market report before utilising it to make a business decision.
Fundamentally, the information and data found in the market reports
should provide detailed insights and provoke thought but should never be taken as the gospel
truth to base a major decision on. Alongside market reports,
businesses may also utilise reports and journals produced by trade and industry associations,
such as the Advertising Standards Authority (ASA) who produce vast amounts of market reports
for the marketing industry.
Ultimately, market reports are an extremely popular method of secondary market research for
businesses as they provide vast amounts of data and information which is specific to the industry
they operate within and can usually be accessed instantly for free or at a relatively low cost.
Government reports are commonly used by businesses
as they provide vast quantities of data and information. However, they tend to be more
generalised and representative of the whole population rather than specific industries.
Importantly, the information and data is typically free of charge, up to date
and very quick to access which is a benefit to businesses who utilise government reports.
An example of a government report which could be useful for small and medium sized businesses is
the small business survey report which provides information and data about the performance of
small and medium sized businesses and the factors that affect the performance
including employment and turnover, ambition and expected future performance,
and any obstacles to business success. Alternatively, businesses can access government
reports which provide data and information about the average time it takes for a large business to
pay its suppliers or the proportion of payments that it does not pay on time.
Businesses can even access data and information about a specific demographic
such as how much people aged 16-25 would be willing to work for or what
percentage of the population is of a certain age. Essentially, government reports exist to provide
factual data and information to businesses of all shapes and sizes which can be used to support
decisions such as rates of pay, the target market, or what products the business develops and sells.
Internal sources of secondary market research refer to information and data which is already
available within the business such as sales reports from previous weeks, months, or years
which support businesses to set forecasts and targets.
Businesses can also use information and data about historic marketing activities to help
them to develop future campaigns by looking at what worked well and not so well in the past.
In more recent years, the use of loyalty cards such as Tesco’s Clubcard has been a
real revelation in terms of the data it provides businesses about their
customers buying behaviours, wants and needs. Initially providing businesses with a vast array
of personal data when customers sign up and then after that businesses are able to track
the shopping habits of each and every customer for what could be considered a relatively small cost
which is usually in the form of discounts and special offers.
As the internal sources of secondary market discussed are based on the business itself, it
can be considered exclusive data and information which is specific to the business, therefore
these insights aren’t usually available to competitors but is accessible to the
business itself at any point in time. However, it’s very important to note
that internal data is limited in its use as it can become outdated quickly and it rarely provides any
information on the market as a whole as it is so specific to the business, therefore it is commonly
utilised by businesses but also supported by additional methods of secondary market research.
So now we’ve looked at the common methods of secondary market research,
lets take a quick look at the advantages and disadvantages it can provide to a business.
First of all, secondary market research typically offers businesses a quick and easy solution
when they require data and information. A lot of secondary research is free of charge
or cost effective and it can provide businesses with industry insights
which they may not have been able to find from primary market research.
Also, secondary market research is often easier to analyse or in some respects
is already analysed for the business at a generic level such as in market or government reports.
However, it’s very important for businesses to be aware of the
disadvantages of using secondary market research. Unlike primary market research which is collected
first-hand by the business for a specific research purpose, secondary market research
is not specific to the business, therefore it may be irrelevant or may not be reflective of
the business and this must be taken into account before making decisions based on the findings.
The age of the research is also a very important factor to consider, today’s business world is
so fast paced, therefore information and data can quite quickly become out of date.
As secondary market research is mainly conducted by external parties,
it’s crucial for businesses to be wary of the potential for bias or inaccurate information in
any forms of secondary market research to ensure they aren’t misled in the decision-making process
and who has funded the research should always be taken into consideration.
and finally Although a lot of secondary market research is free or relatively cost effective,
access to certain data and specialist reports can be very expensive.
So that’s it, secondary market research explained.
If you want to find out more about the purpose of market research
or primary market research methods etc. just head over to our YouTube channel
and watch our videos where we go into depth and provide examples of these in action.
Thankyou for listening, I hope that’s helped you to understand secondary market research.
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