What is primary and secondary market research?
This blog is for those who would like to understand the types of market research.
Market research can be primary or secondary research in nature
Let’s take an example to understand these approaches.
Suppose, you are planning to buy a new mobile.
How do you go about it?
- You check online for new launches.
- You seek opinions from your friends.
- Reach out to a dealer/retailer.
- Check product specifications
- Read reviews
- Check offers, etc.
Based upon these activities, you shortlist a few mobiles which you feel meets your requirement and budget.
Thereafter, you then select the one which you prefer.
So, lets understand in the activities in the context of market research parlance.
- You have conducted online research also called secondary research
- You have interacted with friends/ dealers/retailers, etc., and gathering opinions. This is called primary research.
Now, let us get into specifics.
What is secondary market research?
Secondary data is data collated/assimilated/collected for some purpose.
This is also called desk research as it is conducted through internet research.
The secondary data can be of different forms:
1. Data from Government sources
- Census of India data provide statistics about India’s population.
- The Ministry of Statistics and Programme Implementation provide data on the Indian economy
- Directorate of Economics And Statistics, Ministry Of Agriculture
- Reserve Bank of India
- Ministry of Commerce & Industry
- Ministry of Road Transport and Highway
- Ministry of Tourism, etc.
2. Data from Industry Bodies
- Society of Indian Automobile Manufacturers (SIAM)
- The Association of Mutual Funds in India (AMFI)
- NASSCOM
- Insurance Regulatory and Development Authority of India, etc.
3. Data from company website
Company Annual report, quarterly report, product launches, new investments, promotional activities, corporate social responsibility activities, press release, etc
4. Online news
- Times of India
- Economic times
- Financial Express
- Livemint
- The Hindu
- Ndtv
- Moneycontrol
- Exchange4media, etc
5. Online Business Magazine
- Outlook India
- Business India
- Business Today
- Forbes India
- domain-B, etc
6. Industry reports
- IBEF Research Reports
- Invest India
- CRISIL
- ICRA, etc
7. Social Media
- Social media is a new source of secondary data
- There are social media reports on consumer behavior data
- Professional platforms like LinkedIn, SlideShare, Quora, etc. provide information, trends, opinion, statistics, reports, etc.
Reports available on the internet will be with certain objectives. They must have gathered data with some sample spread across some geographies.
Hence, it is important to understand:
- The perspective or objective with which the study was conducted.
- Who was interviewed?
- How many persons were interviewed?
- Which town class has been interviewed – urban, rural, or both?
- What was the research instrument used?
- What kind of data analysis is available?
- Finding and Report
While conducting secondary market research you will refer to different articles, documents, newsletters, statistics, etc.
You visit various sources as you are unable to get information from one source.
The information available through secondary sources will be specific to specific objectives.
These may not be aligned to your requirement
It may be with some target group and not specific to your target group.
Some articles may get outdated data.
Information may have details but it may not be specific to your area of interest.
As some of the data will be useful and some will be of limited use.
You will compile information from secondary sources and compile a report.
When is Secondary market research useful?
- Census data is the only reliable resource about the population of the country. When you are required to understand the population distribution then you need to rely on this data only.
- There are certain industries like automobiles that are very organized. Industry associations collate data regularly. Hence, you are likely to get information from reliable resources and should be using these.
- Reserve Bank of India also collects a lot of financial data and can be used for understanding trends.
When the data is available but a few years old, you will have a context and that can form a base.
Advantages of Secondary market research
- Easy to gather
- Can be conducted quickly
- Some analysis, views, etc. already available. Hence, easy to understand.
Disadvantages of Secondary market research
- Since data had been collected with a specific context, it may not be specific to your requirement
- The information would be outdated. Recency issue.
- The survey may be conducted with certain objectives like specific target groups, specific geographies, based upon certain criteria, etc. Hence, may not cater to your requirement
- There may be biases or inaccuracies
There may be some gaps in formation and you desire to gather more information.
What is primary market research?
The process of gathering information from a person is called primary research.
You conduct a primary research with your specific objectives.
To meet these objectives, you create some broad information areas around the discussion is conducted.
This discussion can be an un-structed conversation or a structed one.
Primary research can be:
- Qualitative or
- Quantitative in nature
What is Qualitative research?
An unstructured, exploratory study based on small samples
The intend is to provide insight and understanding.
Helps answering the: How, When, Where and Why, of user behaviour.
Examples of qualitative methods are unstructured or semi-structured interviews, ethnography, diary studies, and focus groups, and co-creation sessions.
What is Quantitative research?
Research techniques that seek to quantify data and, typically, apply some form of statistical analysis.
This type of research focuses more on collecting user “data” as opposed to just insight.
In general, it answers the “who” and “what” of user behavior.
Examples of quantitative methods are structured unmoderated testing, surveys, and questionnaires.
When should you rely on primary market research?
Many times data is not as per our requirement.
In such a case, it is better to conduct primary market research.
Advantages of Primary market research
- Specific to your objectives and information areas
- There is a better control of data collected
- Some analysis, views, etc. already available. Hence, easy to understand.
Disadvantages of Primary market research
- Usually cost more
- It takes time to conduct the survey.
- Larger the number and sample spread, the more time is required
- Data needs to be analyzed properly to arrive at conclusive answers.
Mixed Approach: Secondary & Primary market research
Nowadays, researchers use a mixed approach.
They used both secondary sources as well as primary research.
This gives the basic framework from secondary sources and the primary research helps to get insights on current trends.
Summary
Secondary research is a good start for understanding the category or industry.
Trends can be gathered through published interviews of Directors, Marketing heads, etc. of the companies in that category.
Information on social media can be useful.
Primary research enables you to get specific responses to your issues.
Interviews give valuable insights.
It not only gives an understanding of the past behavior but also current trends and some future perspectives.
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