Market research is an incredibly important part of a business’s success. There are entire teams dedicated to performing market research for businesses, and those teams often focus on two different types of research: primary and secondary. There are pros and cons of each type of research, which this article will detail.
Definitions of Primary vs. Secondary Market Research
To understand what type of research is best for your company to utilize, one first needs to understand the similarities and differences of primary vs. secondary market research. Although there are distinct differences, both types can be either qualitative or quantitative, and are beneficial, albeit in their own ways.
Primary research is often the first step in understanding what a customer base wants or needs. This type of information search is done by the person wanting the research, or by a hired party. It consists of searching out customers firsthand in any of the following ways:
- Online discussions
- Online/mobile surveys
- In-person interviews
- Phone interviews
- Focus groups
- Mystery shopping
Pros and Cons of Primary Research
Primary research can be an excellent source of specific market research for a business regarding its environment or customer base. The information collected will apply to exactly what that company is experiencing.
However, there are some cons to this type of market research for a business. Primary research can take more time and/or financial resources that a small, growing company might not have while they are starting up. A company needs to know its strategy and target market quickly before beginning.
Exploratory vs. Specific Primary Research
The two types of information collected from primary research are exploratory and specific.
Exploratory research is general, it requires asking for experiences and opinions. It often comes from open-ended interviews.
Specific research typically identifies specific problems, concerns, critiques, and possible solutions. This portion of research usually comes from more structured conversations.
This type of information is just what the name implies: second-hand. Primary research has already been gathered by another source, and then is used again by another researcher. This can also include government-funded studies and reports.
Pros and Cons of Secondary Market Research
Secondary market research is helpful for many small businesses that do not have the resources or funds to conduct large-scale research projects on their own. There is also an abundance of information that can be viewed and used quickly without having to wait for other projects to be completed.
For example, you could perform a search on the Internet with the appropriate keywords or phrases as a starting point. Secondary market research can also be obtained through business magazines, journals, or library reference materials.
There are, however, some drawbacks to this type of market research. Secondary research can often be outdated or may have been completed in an environment or social culture which is not similar to or appropriate for the company needing the information.
Some agencies that own secondary research might also require a fee for access, which could be another hurdle for small businesses to overcome.
The Future of Secondary Market Research Companies
Although market research has been used for ages as a way to help improve new and veteran businesses, as the age of technology evolves, research tactics will also evolve. Artificial intelligence and other new technologies have developed faster and more efficient ways to collect and streamline data.
This new wave of technological evolution and resources availability also has pros and cons.
Having so much research available at the fingertips of business leaders means that time and energy will be freed up for other creative thinking and project leadership. However, it might mean that companies stop doing their own studies into other more applicable target markets, thus ‘watering down’ their resources.
There is a large push for more information from secondary market research companies. This information is desired to be quick and accurate at the same time, up with the technological times yet still scientifically sound, full of the entire market’s worth of information yet specific enough for an individual company’s needs.
For a secondary market research company to be successful, it will need to know how to balance all of these needs and grow with the ever-changing times.
Companies will need to be able to flexibly move toward one end of the spectrum or the other to meet the needs of their customers. The best ones will have the ability to use technology to their advantage while using human brainpower to connect with customers for critical problem-solving solutions.