Secondary Market Research

Secondary market research definition

Secondary market research is one of the two types of market research that can be employed by businesses to get necessary information/data about a target market.

There are two types of market research - primary market research and secondary market research. In this explanation, we will be looking at secondary market research.

Secondary market research can be quantitative, based on data and statistics, or qualitative, based on opinions, beliefs, attitudes, or intentions. Tools used for secondary market research include Google Trends, Google Analytics, school archives, libraries, organisational reports, Government reports, market reports, journals, publications, dissertations, etc.

Secondary market research sources

The various secondary market research sources can be grouped into two, namely, internal sources and external sources (see Figure 1 below).

Figure 1. Types of Secondary Market Research

1. Internal sources

This refers to information or data obtained from past business activities either on a departmental level or organisation level. An example of this is a business's previous sales figures which can be used by the rest of the department to spot sales trends and predict future sales growth. Another example is the use of customer loyalty cards, which provides businesses with the opportunity to gain insight into customer buying habits, thus making it easier to target them for promotional campaigns.

Internal sources of information should be considered first for information because they are cheap, quick, and exclusive to the business. However, there are cases where internal sources may be incomplete, out of date, or have no relevant information for the intended purpose. In any of these cases, businesses can consider using external sources to gather data and information.

2. External sources

This refers to sources outside the business, that have the necessary data needed by the business. This includes public media, trade publications, company reports, governmental reports and commercial market research organisations such as Euromonitor or Statista. These sources are particularly useful when a business either requires new information, is looking to update its existing information, or requires data on external market trends and patterns.

Secondary market research methods and examples

Below are a few examples of secondary market research methods.

Collecting information and data from online sources

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

Collecting information from qualitative reports

Articles, newsletters, books, reviews, and documentaries are sources of qualitative information businesses can use for market research. Information collected from qualitative sources can be gathered and analysed in order to dive deep into a particular topic. An example of this is seen in a business that needs information on women's buying habits for a marketing campaign; relevant information can be found by analysing online reviews.

Academic resources

Academic articles and journals are particularly useful for this purpose as researchers regularly carry out detailed and empirical research on various topics. Students' dissertations are also a good source as they can both provide key primary data and secondary information needed for market research.

Secondary market research advantages

The advantages of secondary market research include:

1. Secondary sources with pre-recorded data and information are easily accessible and always available.

2. Due to the fact that the data and information were pre-collected, market research becomes quicker.

3. Secondary market research saves businesses from spending too much money on their market research. Information from secondary sources is available for free, or at a lower cost than carrying out your own primary research.

4. Secondary market research provides businesses with the flexibility to scale up results quickly due to the large range of data available. The businesses might not have enough funds to survey most of the population in a country, but the government often does.

5. Secondary market research can also be used to get pre-research insights to determine whether it is worth it for the company to carry out long and expensive primary research.

Secondary market research disadvantages

1. Data obtained from secondary market research is usually not exclusive. It is easily accessible, and can’t be used where very specific data is needed.

2. Information and data gathered from secondary market research need to be analysed and verified before use to avoid errors. It is important to always use secondary data from reliable sources.

3. Data from secondary market research needs to be carefully monitored by the researcher before interpreting results.

4. Data collected from secondary market research may be outdated.

5. Data collected from secondary market research is extensive and may not be specific, hence it will require researchers to analyse plenty of data to get relevant information.

Secondary market research example

A female clothing brand called Clothes20 is looking to expand its business activity into a new market, thus it is conducting secondary market research to understand its target customers' fashion buying behaviour. External sources will be used to gather information about customer behaviour, as the brand is trying to enter a new market and the business's internal information sources have little information on the subject.

During the course of the research, data showing how much is spent on female fashion within the location of interest will be collected from online platforms such as Statista, Google Trends, and Research Gate. Qualitative information is also collected by looking at customer reviews on identified competitors' websites in order to identify customers' pain points and market opportunities. As a result of this preliminary secondary market research, Clothes20 will understand what opportunities it has in the market.

In conclusion, secondary market research provides businesses with relevant insights on competitors, market trends, market size, and customer behaviour, helping businesses make better decisions and strategies on how to introduce new products or services. These insights can be obtained through either internal sources or external sources, saving the business time and costs.