{"id":1128,"date":"2020-09-27T10:43:29","date_gmt":"2020-09-27T10:43:29","guid":{"rendered":"https:\/\/emilien2.sg-host.com\/?p=1128"},"modified":"2020-10-18T19:15:52","modified_gmt":"2020-10-18T17:15:52","slug":"market-research-primary-secondary","status":"publish","type":"post","link":"https:\/\/www.companyplan.com\/market-research-primary-secondary\/","title":{"rendered":"Market Research for Business Planning: Primary and Secondary"},"content":{"rendered":"\t\t
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How to research the market for your business idea like a pro<\/p>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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You know your business idea is a winner<\/strong>.<\/p>

You are motivated<\/strong> to make it succeed.<\/p>

And you are excited<\/strong> to get started.<\/p>

I get it.<\/p>

But it’s dangerous<\/strong><\/span> to jump right in without first making reasonably sure that you are on the right track<\/strong> and this business is actually worth your while<\/strong>.<\/p>

Imagine wasting months or even years of your life<\/strong> on a venture that was destined to fail from the start, and you could have avoided it by doing some basic market research.<\/p>

And if you are looking for outside financing<\/strong>, investors and lenders expect you to research your market and test your product or service. That is especially true if you are a startup.<\/p>


So, collect, digest and analyse pertinent data. Arm yourself for the inevitable scrutiny and grilling<\/strong> from your potential backers. It will come.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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WHAT Is Market Research?<\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\tMarket research is a systematic effort to collate information about target industry, market and customers to build business strategy that succeeds in a competitive marketplace.\t\t\t\t<\/div>\n\t\t\t\t\t\t\t
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WHY Should You Do Market Research?<\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\tThe purpose of market research is to prove that there is a real need with sustainable potential for a product or service in the market.\t\t\t\t<\/div>\n\t\t\t\t\t\t\t
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Use market research as an opportunity to question<\/strong> your business plan and uncover issues<\/strong> that could cause you serious headaches in the future, including (but definitely not limited to):<\/p>

  • Are you sure that enough people are actually willing to pay for what you are selling?<\/li>
  • Can you stand out in the sea of established and fast moving competitors?<\/li>
  • Is the industry contracting or prohibitively riddled with regulatory hoops to jump through?<\/li><\/ul>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    You would be surprised how many entrepreneurs reconsider<\/strong> their plan of action altogether after researching and analyzing the industry and market.<\/p>

    It is a good investment<\/strong> of your time that you will not regret. Trust me.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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    HOW Do You Conduct Market Research?<\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    When you hear market research, you probably think:<\/p>

    I\u2019ll just Google the name of my target market alongside words such as \u2018market \/ industry\u2019 and \u2018trends \/ forecasts \/ growth\u2019.<\/p>

    And you are right, that is a good way to start, but:<\/span><\/p>

    There are two<\/strong> kinds of market research – primary<\/strong> and secondary<\/strong> \u2013 and you should do both<\/strong> to properly address any market research assignment, such as the market analysis section of a business plan:<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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    1. Primary Market Research<\/h3><\/div>\t\t\t\t\t\t\t\t\t
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    \n\t\t\t\t\tPrimary market research involves active fieldwork, online and offline, where you gather your own original data yourself or by using a professional market research firm to collect specific information for a particular business, product or service in a given target market.\t\t\t\t<\/div>\n\t\t\t\t\t\t\t
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    2. Secondary Market Research<\/h3><\/div>\t\t\t\t\t\t\t\t\t
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    \n\t\t\t\t\tSecondary market research means passive desk research, which involves collecting existing data already researched and published by reliable outside sources to collate any required information.\t\t\t\t<\/div>\n\t\t\t\t\t\t\t
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    There are many different ways you could go about collecting data for your industry and market research, depending on the type of your business, needs, resources and circumstances. So, we have selected a few popular approaches for you to consider:<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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    PRIMARY Market Research Methods<\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    Your primary<\/strong> market research could include some of the following methods:<\/p>

    • Experimentation and trials<\/li>
    • Field research<\/li>
    • Customer interviews, surveys and focus groups<\/li>
    • Observation<\/li>
    • Internal data<\/li>
    • Consulting experts<\/li><\/ul>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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      Experimentation and Trials<\/h3>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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      For example, testing a product or service on the high street or online by selling a minimum viable product on a limited time basis.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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      Field Research<\/h3>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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      Field research examples:<\/p>

      • Doing traffic counts at a retail location you are considering<\/li>
      • Going online, phoning, or driving around to identify, visit and ‘investigate’ competitors and suppliers<\/li><\/ul>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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        Customer Insights<\/h3>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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        Gain insight into your customers’ minds through:<\/p>

        • Customer interviews<\/li>
        • Surveys<\/li>
        • Focus groups<\/li><\/ul>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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          Talk to people or businesses (e.g. corporate buyers) that fit the profile of your <\/span>target customers<\/strong> about their needs, wants and preferences as related to your business and offering (e.g., what they like and dislike or how they make buying decisions).<\/span><\/p>

          These can be conducted online<\/strong>, phone<\/strong> or in-person<\/strong>, and may be as informal<\/strong> as walking around the target neighborhood where you would like to set up shop and talking to potential consumers, or as formal<\/strong> as hiring a market research firm to conduct professional-level research.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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          Observation<\/h3>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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          For example, observing customers and sales in a store, taste tests, mystery shopping. Observing consumers in action is as crucial as talking to them.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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          Internal Data<\/h3>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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          Analyzing internal business and sales data of an existing business (e.g., databases and enterprise management systems)<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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          Consulting Experts<\/h3>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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          Other business people, industry experts, suppliers and even competitors are a great source of information:<\/p>

          • Talk to other business owners.<\/strong><\/li><\/ul>

            Especially those in non-competing markets with similar services or products (e.g. different city) . Attend events, conferences and talk to other business owners.<\/p>

            • Talk to experts.<\/strong><\/li><\/ul>

              Consultants, professors, journalists, corporate managers and other experts are constantly writing about and commenting on specific industries and markets.<\/p>

              • Talk to suppliers and\/or competitors.<\/strong><\/li><\/ul>

                While you will not uncover any trade secrets, the conversation could provide valuable insights into the industry as a whole.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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                Talking to potential customers and observing them in action is crucial.

                So, launch your web browser and Skype\/Zoom apps, pick up the phone, and get out and talk to people.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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                SECONDARY Market Research Methods<\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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                Secondary<\/strong> market research is data sourced from external resources, including:<\/p>

                • Trade data and journals<\/li>
                • Media that target customers prefer to read, listen to or view<\/li>
                • Government statistics<\/li>
                • National and international economic data<\/li>
                • Industry profiles and research indicating market trends<\/li>
                • Demographic profiles<\/li>
                • Market research reports by professional firms<\/li>
                • Books and other publications<\/li>
                • University and government research studies<\/li>
                • Examples from non-competing markets to study other businesses with similar products\/services\/ventures in other cities, countries or even industries<\/li>
                • Intelligence on competitor activity<\/li><\/ul>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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                  You can find secondary information in many places, such as:<\/span><\/p>

                  • Online (e.g., company records, company websites, websites capturing financial information trends, social media sites)<\/li>
                  • Libraries<\/li>
                  • Chambers of commerce<\/li>
                  • Trade and industry organizations<\/li>
                  • Vendors and suppliers who sell to your industry<\/li>
                  • Government agencies<\/li>
                  • International bodies<\/li>
                  • Competitors\u2019 online and offline resources (e.g., websites, stores, ads, newsletters)<\/li><\/ul>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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                    WHEN Should You Use Primary and Secondary Research?<\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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                    Best Use of Secondary Research<\/h3>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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                    Using sources of information that already exist can save<\/strong> a lot of time<\/strong>, energy<\/strong> and money<\/strong>. On the other hand, the data might not be as tailored to a specific audience as one would like or need.<\/p>

                    While secondary research is less targeted<\/strong> than primary research, it can yield valuable information especially when answering the following two types of questions:<\/p>

                    1. Questions that are general<\/strong>, quantifiable<\/strong>, and not practical to address through primary research, such as assessing macro-economic conditions (e.g., industry trends and demographic statistics<\/li>
                    2. Questions that could make customers uncomfortable<\/strong> if asked directly (e.g., age and income levels)<\/li><\/ol>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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                      If you are looking for <\/span>outside financing<\/strong>, investors and lenders expect you to carry out some level of primary research, not only consult secondary sources. That is particularly relevant if you are a startup.<\/span><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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                      Best Use of Primary Research<\/h3>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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                      Secondary research may be a good starting point, but asking consumers yourself can give you a much more nuanced<\/strong> understanding of your target audience.<\/p>

                      The benefit of primary research is that you can target<\/strong> selected groups (e.g., existing customers or desired geographic market) and tailor your research instrument to answer specific questions.<\/p>

                      But, the drawback of direct research is that it can become rather time<\/strong> consuming<\/strong> and costly<\/strong>. Also, the results are not available immediately.<\/p>

                      That can be especially true when the original information for primary research is not gathered through your own efforts but performed on your behalf by an outsourced professional market research firm.<\/p>

                      As a result, primary research is best used to answer a particular<\/strong> question or set of questions about your business or customers.<\/p>

                      For instance, primary research could investigate reactions to your branding\/product\/service, improvements you could make to buying experience, and where customers might go instead of your business:<\/p>

                      • Which products and services do buyers need<\/strong> or want<\/strong>? (e.g., preferences, expectations, likes and dislikes about your product or service)<\/li>
                      • What factors<\/strong> influence the buying decisions of your customers? (e.g., price, service, convenience, branding)<\/li>
                      • What prices<\/strong> should you set for your products and services?<\/li>
                      • Who are your competitors<\/strong>, how do they operate and what are their strengths and weaknesses?<\/li><\/ul>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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                        REFERENCING Your Research Sources<\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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                        Make sure that all stats, facts and figures from external sources included into your business plan are properly referenced. Not doing so undermines the credibility of your plan.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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                        How Should You Reference Your Market Research Sources?<\/h3>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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                        Tell the reader of your business plan how you did your market research. Prove what the facts are and where you got your data. Be as specific as possible and provide statistics, numbers, and sources:<\/p>

                        • Primary market research:<\/strong> Have you conducted any primary research? What types of primary research have you carried out? \u00a0What were your resources and your results?<\/li>
                        • Secondary market research:<\/strong> What secondary research have you carried out? What were your resources and your results? Have you referenced all sources used in your business plan?<\/li><\/ul>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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                          When doing secondary research, always make sure that your sources are reputable. This gives the reader more confidence in the information provided and in the case you are making for your business idea.<\/p>

                          The sources also should be noted in both the main text of a document as well as the Appendix.<\/p>

                          Example:<\/p>

                          • Reference in main text:<\/li><\/ul>

                            U.S. Census Bureau (2020)<\/em><\/p>

                            • Reference list in document appendix:<\/li><\/ul>

                              U.S. Census Bureau; December 2020; Demographic and Housing Estimates; Accessed: 31 December 2021; Link: https:\/\/census.gov\/data\/demographic-housing<\/em><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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                              So, the general referencing formula is:\u00a0<\/span>[author, date, title, publisher]<\/strong><\/em><\/p>

                              Notes:<\/p>

                              • Author can be the same entity as publisher<\/li>
                              • Optional for online sources: add date of access and\/or link<\/li>
                              • Publication date could be just a year, month-year, or even day-month-year if the information is particularly time sensitive<\/li>
                              • Title could include a sub-title<\/li><\/ul>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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                                Most importantly, always make sure that you comply with the reference requirements of the recipient of your document.<\/span>
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                                For example, if you are writing a business plan for a grant or visa application, the organization you are applying to could have issued their own specific instructions on how to reference research sources. <\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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                                Top 5 MISTAKES in Market Research<\/span>
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                                1. Using Exploitative Market Research Services<\/h3>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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                                Due to the perceived complexity of market research, there are some agencies that charge unreasonably high fees for rudimentary research that businesses can easily conduct on their own.<\/p>

                                If you plan to hire a professional market research firm, shop around until you find a reputable<\/strong> company offering fair<\/strong> prices.<\/p>

                                Otherwise, in addition to keeping the costs down, an added benefit of doing your own research is that you will get to know the market<\/strong> for your business even better.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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                                2. Not Utilizing Free Public Resources<\/h3>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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                                Some industry and market research resources are available for free and some provided for a fee. But it does not always mean that paid information is better.<\/p>

                                For example, in the United States, some of the most extensive and valuable sources of information for the market analysis section of a business plan can be found in the databases, publications and other free resources of the U.S. Department of Commerce, the U.S. Small Business Administration (SBA), the U.S. Census Bureau, and other governmental agencies.<\/p>

                                As for the paid resources, libraries often subscribe to research journals and magazines that may help improve your research. Some libraries even provide free access to reports from professional market research firms that can easily cost more than US$1,000 apiece.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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                                3. Family Members Only<\/h3>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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                                Selection of market research subjects is crucial for producing valid results and enable the business to understand the preferences of its actual customers.<\/p>

                                Using friends and family exclusively as respondents for market research is a bad idea, because this group of respondents may be partial to the researcher, and they may not even be the target market for that particular business\/product\/service\/research question.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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                                4. Information Overload<\/h3>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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                                If your industry research is for a business plan or a similar purpose, do not overload the reader in the main body of the document. Move everything that is not essential to telling the story into the Appendix. For example, place the detailed results of any market surveys, trials or focus groups that were summarized in the main body of the plan into the Appendix.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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                                5. Overthinking It<\/h3>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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                                Remember, business planning is not<\/strong> about your ability to do professional-level market research\u2013unless you are a corporation.<\/p>

                                A business plan intended for a potential investor, lender, or business partner simply needs to show your understanding<\/strong> of where your business fits into the grand scheme of things within your market and industry\u2013and demonstrate that you have incorporated that knowledge into making sound strategic decisions<\/strong>.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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                                How to research the market for your business idea like a pro Share on facebook Share on twitter Share on pinterest Share on linkedin Contents You know your business idea is a winner. You are motivated to make it succeed. And you are excited to get started. I get it. But it’s dangerous to jump […]<\/p>\n","protected":false},"author":1,"featured_media":1188,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5,16],"tags":[],"_links":{"self":[{"href":"https:\/\/www.companyplan.com\/wp-json\/wp\/v2\/posts\/1128"}],"collection":[{"href":"https:\/\/www.companyplan.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.companyplan.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.companyplan.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.companyplan.com\/wp-json\/wp\/v2\/comments?post=1128"}],"version-history":[{"count":0,"href":"https:\/\/www.companyplan.com\/wp-json\/wp\/v2\/posts\/1128\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.companyplan.com\/wp-json\/wp\/v2\/media\/1188"}],"wp:attachment":[{"href":"https:\/\/www.companyplan.com\/wp-json\/wp\/v2\/media?parent=1128"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.companyplan.com\/wp-json\/wp\/v2\/categories?post=1128"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.companyplan.com\/wp-json\/wp\/v2\/tags?post=1128"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}