Secondary Market Research

While most secondary data is inexpensive to obtain, companies may have to pay a secondary data provider to access specialized data.

Secondary Market Research Methods

Secondary market research involves gathering data from existing sources to gain insights into a market, industry, or consumer behavior. The methods for secondary market research include:

Analyzing industry reports

Industry reports provide comprehensive information on a specific industry, including market size, growth trends, competitive landscape, and future prospects. For example, a company planning to enter the electric vehicle market can review industry reports to understand the current market situation, demand patterns, and major players.

Analyzing government publications

Government agencies publish a wide range of data and statistics on various industries, demographics, and economic indicators. For example, a startup looking to open a retail store in a new location can access census data to evaluate the area's population, income levels, and age distribution.

Reviewing academic research

Universities and research institutions often conduct studies and publish research papers on various topics, including consumer behavior, market trends, and emerging technologies. For instance, a pharmaceutical company can review academic research on the effectiveness of different drug delivery methods to inform their product development.

Reviewing trade publications

Trade publications are industry-specific magazines, journals, or newsletters that provide insights, news, and analysis relevant to a particular sector. A company in the solar energy sector can follow trade publications to stay informed about the latest technological advancements, regulations, and market trends.

Performing competitors analysis

Analyzing competitors' websites, press releases, marketing materials, and financial reports can provide valuable information about their strategies, product offerings, and performance. For example, a company looking to launch a new software-as-a-service platform can review competitors' websites to understand their pricing structures, features, and target audience.

Monitoring media coverage

News articles, blog posts, and social media can provide insights into public sentiment, emerging trends, and relevant events. A food industry company can monitor media coverage to identify popular diets or consumer preferences, helping them adjust their product offerings accordingly.

By using these secondary market research methods, businesses can gather valuable data to inform their decision-making and strategy development without the need for time-consuming and costly primary research.

Secondary Market Research Sources

The method of gathering secondary data is relatively straightforward. You simply go to reliable sources and search for secondary data relevant to your needs.

• Public sources: These are freely available resources such as government publications, websites, public libraries, and statistics bureaus. Examples include the U.S. Census Bureau, Eurostat, or the World Bank.
• Commercial sources: These are paid sources of information, such as industry reports, market research databases, and subscription-based publications. Examples include Statista, IBISWorld, or Gartner.
• Educational institutions: Academic research papers, dissertations, and theses can be valuable sources of secondary market research. University libraries, online academic databases, and research repositories like JSTOR, Google Scholar, or SSRN provide access to such resources.
• Trade associations and organizations: Industry-specific associations and organizations often publish relevant data, reports, and newsletters that can be useful for secondary market research. Examples include the National Retail Federation, the Consumer Technology Association, or the American Marketing Association.
• News and media outlets: Newspapers, magazines, news websites, and television networks provide information about current events, trends, and public sentiment. Examples include The New York Times, Forbes, or CNBC.
• Social media platforms: Social media platforms like Facebook, Twitter, LinkedIn, or Instagram can be valuable sources for gathering insights on public opinion, consumer preferences, and emerging trends.

These sources of secondary market research can be accessed and utilized through the methods mentioned earlier, such as analyzing industry reports, reviewing academic research, or monitoring media coverage.

How to Conduct Secondary Market Research

The process of conducting secondary market research consists of five steps:

1. Define the research needs

Before doing any research, the researchers need to clarify the research objectives. Why are we conducting research? How can it contribute to the marketing effort?

2. Choose research sources

Once the research's purpose is identified, researchers need to choose the data sources. The sources can be internal, external, or both. One thing to note is that sources can vary widely in quality and credibility. For example, business magazines and published journals have a high-credibility score, whereas a random article or blog post on the Internet might be biased and unreliable.

3. Collect secondary data

The next step is to select data based on the company's needs. The quickest way to source high-quality information is to look at online commercial databases or to buy from secondary data agencies. However, search engines and libraries are also a big help when the company is tight on budget.

4. Combine acquired data

The information collected should be grouped in the same categories or format. This grouping approach simplifies the secondary data analysis and cuts out content that does not contribute to research.

5. Analyze data

Finally, the data needs to be analyzed to answer the research question. If the research needs are unmet, researchers need to look for more secondary data or create their own. Researchers can also use secondary data to form a new perspective and help expand the understanding of a topic.

6. Provide conclusions and feedback

Once the data has been collected and analyzed, researchers must formulate and organize it to allow managers to draw feedback from it. Oftentimes a research report is created that outlines results, conclusions, implications, and recommendations.

Advantages of Secondary Market Research

Secondary market research can be an efficient and cost-effective way for businesses to gather information about their market, competitors, and customers using existing data sources.

Cost-effective

Secondary research is generally less expensive than primary research, as businesses can access existing data sources without spending resources on data collection. For example, a startup can use free government publications to analyze the demographics of their target market without incurring additional costs.

Time-saving

Secondary research provides businesses with immediate access to data, eliminating the need for planning and conducting time-consuming primary research. For example, a company can quickly gather industry insights from published reports instead of waiting for the results of a custom survey.

Broad scope

Secondary research can provide a comprehensive overview of market trends, historical data, and industry benchmarks. For example, a business can examine multiple years of financial reports from competitors to understand long-term growth patterns and financial stability.

Disadvantages of Secondary Market Research

While secondary market research offers several benefits, it's essential to be aware of the potential disadvantages as well. Here, we'll explore the disadvantages of secondary market research.

Lack of specificity

Secondary research may not address specific research questions or cater to unique business needs, as it wasn't collected for that purpose. For example, a company seeking information on customer preferences for a niche product may struggle to find relevant secondary data.

Potential outdated information

Since secondary research relies on existing data, it may be outdated or no longer relevant, limiting its usefulness for decision-making. For example, a business looking to enter a rapidly changing market may find that historical data is insufficient for understanding current trends.

Quality and reliability concerns

The accuracy and reliability of secondary research data may vary, as businesses have limited control over how the data is collected and analyzed. For example, a company using data from an unknown source might not be able to trust its accuracy or validity.

To address the disadvantages of secondary research, researchers should accompany it with primary research - collecting original data through interviews, observations, etc. Using high-quality sources to minimize biases and incorrect information is also crucial.

Secondary Market Research Examples

Examples of secondary market research include analyzing industry reports, reviewing academic research and trade publications as well as performing competitors analysis or monitoring media coverage. Let' see how companies can use them in action.

Market trend analysis for a fashion retailer

A fashion retailer wants to identify upcoming trends and preferences to inform their product line and marketing strategy. They conduct secondary market research by reviewing fashion magazines, blog posts, and social media influencers' content. This helps them identify popular colors, patterns, and styles, which they incorporate into their clothing designs and promotional campaigns.

Fig. 2 - Reviewing fashion magazines to identify trends is an example of secondary market research

Competitor pricing analysis for a new restaurant

A new restaurant wants to understand the pricing strategies of its local competitors to determine its own menu pricing. They gather secondary data by visiting competitors' websites and analyzing their menus. Based on this research, the restaurant can set competitive prices that appeal to customers and position themselves effectively in the market.

Industry growth projections for a renewable energy startup

A renewable energy startup is seeking investment and wants to demonstrate the potential for growth in its industry. They conduct secondary market research by examining government publications, industry reports, and academic research on renewable energy trends and projections. This data allows them to present a compelling case to potential investors, showcasing the promising growth trajectory of the renewable energy sector.