Secondary Market Research

Market research can be overwhelming, but the good news is you don't have to start from scratch. Using secondary market research methods can save a lot of time and effort. Explore various methods and sources of secondary market research, and discover how to conduct secondary market research like a pro. Weigh the advantages and disadvantages, and learn from real-life secondary market research examples. 

Secondary Market Research Secondary Market Research

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Table of contents

    Secondary Market Research Definition

    Secondary market research is when a company uses existing information from other sources, like reports, articles, or surveys, to learn about its market and customers. It's like using someone else's research to help you make decisions for your business, without having to collect new data yourself.

    Secondary market research, also known as desk research, is the process of gathering, analyzing, and interpreting data already collected by others, including industry reports, government publications, academic research, and competitor analysis, to inform business decisions.

    Secondary market research is one of the two types of market research that businesses can employ to get necessary information/data about a target market. Market research refers to the process of studying a target market and determining the market value or viability of a new product or service in said market.

    Imagine a world where everyone loves a specific type of fruit, but no one knows which is the most popular. A juice company wants to create a new drink that will be a hit with customers. Instead of conducting their own survey, they find a recent study on fruit preferences conducted by a well-known research firm. The study reveals that strawberry is the most popular fruit, so the juice company decides to launch a new strawberry-flavored drink based on the findings from the secondary market research.

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

    Nielsen and Gartner are two major global secondary data suppliers. Nielsen is a US-based company offering marketing and media information analytics for clients in over 100 countries. Here, researchers can retrieve plenty of data on customer behavior - where they buy their products, what they watch or listen to daily, etc. Gartner is a subscription-based service that provides access to on-demand published research content produced by over 2,300 research experts worldwide.1

    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.

    Like primary data, secondary data can be qualitative or quantitative. Qualitative data is descriptive and answers the question "why" or "how", whereas quantitative data is related to numbers and tell us "how many", "how much", and "how often". Qualitative data is acquired via interviews or observations, whereas quantitative data mainly comes from statistics or sales reports. Both types of data are essential to secondary research and help researchers analyze different angles of the research problem. 3

    How to Conduct Secondary Market Research

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

    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?

    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.

    How to evaluate research sources

    To determine the quality of secondary data sources, the researcher needs to consider the following:

    • Research purpose
    • The audience
    • Authority and creditability (Author's qualification, publisher)
    • Accuracy and reliability (Citations and data collection methods).
    • Currency (Date of publishing)
    • Bias (Opinions or facts).4

    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.

    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.

    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.

    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.

    Secondary Market Research Reviewing fashion magazines StudySmarterFig. 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.

    Secondary Market Research - Key Takeaways

    • Secondary market research is the process of gathering, analyzing, and interpreting data already collected by others, including industry reports, government publications, academic research, and competitor analysis, to inform business decisions.
    • The main benefit of secondary market research is saving research time and costs.
    • 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
    • There are five steps of primary market research: defining the research needs, choosing sources, collecting secondary data, combining the acquired data, and analyzing it.
    • The main disadvantage of secondary research is that the data may be outdated, not specific or low quality.

    References

    1. Software Testing Help, Top 10 Market Research Companies [2022 Review & Comparison], 2022.
    2. The-Definition, Commercial online database, 2022.
    3. Career Foundry, Quantitative vs Qualitative Data: What's the Difference?, 2022.
    4. Brock University Library, Evaluating Information Sources, n.d.
    Frequently Asked Questions about Secondary Market Research

    What is an example of gathering secondary data?

    Online resources and resource banks such as Google Scholar, Research Gate, Euromonitor, and Statista provide relevant information and data on a target market for businesses. For example, data can be gathered from Statista to identify the services or products customers spent the most money on in a certain industry during a set period of time. 

    What are the 5 methods of collecting secondary data?

    Some of the methods of collecting secondary data include buying them from a supplier, searching commercial online databases, using search engines, or using internal sources like sales reports, customer feedback, etc.

    What is secondary research in marketing?

    Secondary market research, also known as desk research, involves businesses using existing information or data. This type of data has already been collected by someone other than the researcher.

    What should be in secondary marketing research?

    To conduct secondary research marketers have to define the research needs, choose research sources, collect the data, combine the data, analyze the data, and come up with conclusions.

    What is an example of secondary market research?

    An example of secondary market research includes searching online commercial databases. These are archives of data from commercial sources on the Internet. Researchers can dig around these databases to find their secondary data sources.

    What useful data can marketers gather from suppliers and distributors?

    Marketers can gather useful data from suppliers and distributors on product availability, pricing, customer preferences, and emerging trends in the industry.

    How does secondary research help a business?

    Secondary research helps a business by providing cost-effective and time-saving access to existing data on market trends, competitors, and customer behavior to inform decision-making and strategy development.

    Why is secondary market research important?

    Secondary market research is important because it allows businesses to gain valuable insights and understanding of their market, competition, and customers without the need for resource-intensive primary research.

    Test your knowledge with multiple choice flashcards

    Primary research uses _________ while secondary uses ___________.

    Companies can buy secondary data from a third-party provider. 

    Government censuses are an internal source of secondary data. 

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