1 item tagged "market understanding"

  • Why your understanding of a market benefits tremendously from primary research

    Why your understanding of a market benefits tremendously from primary research

    Broadly speaking, market research can be categorized into primary and secondary research.

    • Primary market research solicits new information from sources directly — such as customers in a specific target market — through interviews or consumer surveys.  
    • Secondary market research includes previously published information that has been compiled by outside organizations such as government agencies, industry associations, and trade publications.

    Both types of market research are valuable, but primary research is often veiled in a deeper sense of mystery. How is primary data collected? Why is it necessary to carry out primary market research, and what expertise is required?

    A quick web search may not provide concrete answers for these questions. Many top-ranking articles on primary market research are vague, focus on broad definitions, and are not written by professional market researchers.

    For a deeper dive into this subject, I turned to Jennifer Christ, a long-time analyst and manager at The Freedonia Group, a leading market research firm and division of MarketResearch.com. As part of her job, Jennifer trains analysts to gather and evaluate primary data — such as consumer surveys and phone interviews — for use in industry studies.

    The key advantages of primary research

    According to Jennifer, secondary research provides a solid foundation for understanding a market at a high level, but primary research can help fill in the gaps and offer a richer, more nuanced perspective. Primary data allows analysts to validate market size estimates and growth outlooks and gain targeted insights into specific industry developments or drivers.

    “We really seek to evaluate a market from multiple angles, and primary research helps us better explore other viewpoints that might get less coverage in industry, business, or the general media,” Jennifer explains. “It also lets us ask questions and talk about trends and issues that might not be mentioned in other sources.”

    In addition, primary research enables analysts to see beyond the hype and get a reality check on hot trends. “For instance, a supplier of an innovation or technology may think it’s going to be market changing, but checking in with potential end users, we might learn that they are satisfied with what they are using, the new tech doesn’t solve an existing problem, or they think the cost to change outweighs potential benefits, so they are far less enthused,” Jennifer says.  

    Primary research based on consumer survey data can also shed light on consumer attitudes, their decision-making process, and the reasons why they make certain purchases. Analysts can break down this data based on demographic information such as age, region, gender, income levels, family size, living situation, whether they work from home, and other relevant attributes.

    Using survey data to understand different types of consumers and the motivations that drive them can help companies build more effective marketing and product development strategies.

    Primary market research methods: a brief overview

    Primary research can be conducted through a variety of methods, but these approaches often require a high level of expertise to produce accurate, meaningful results.

    For example, consumer survey data can be gathered through online and booklet-based surveys, but it’s important to screen for quality and use an appropriate sample size that is representative of the overall target population. Once the data is collected, the information must be put into context and evaluated based on historical trends and other key factors.

    Phone interviews are also more complex than they may first appear. To conduct interviews with industry participants, analysts need a strong network of contacts within specific industry sectors that allows them to see a product or market category from many different angles. For example, Jennifer often targets end-users, manufacturers, retailers and distributors, or material suppliers for individual or group interviews. She recommends speaking with up-and-coming participants, as well as established players and market leaders.

    Research analysts must also engage the right people within an organization. “We reach as broadly as we can, but we find that people in positions working in marketing or sales (at a manager or VP level) tend to be aware of a company’s performance and pain points and trends and positioning for the industry in general,” Jennifer explains. “Anyone who works in a company’s internal insights or customer analysis team is also often quite helpful. Obviously, if our questions are more technical, we seek out people in research and development areas.”

    To engage busy senior-level managers in primary research, it's also crucial to build strong rapport and strive for a mutually beneficial conversation. “I like to keep it as conversational as much as possible,” Jennifer says. “Not only are people more comfortable in that mode, but it is more likely to bring up things I might not have thought of. Also, I think it’s important for the person I’m talking to to feel like they learned something from our chat as well. They are more likely to think that talking with us is worth their valuable time.”

    There's no doubt primary market research involves extra legwork, skill, and dedication, but it also provides a "boots on the ground" level of industry knowledge that's difficult to achieve through any other approach.

    Author: Sarah Schmidt

    Source: Market Research Blog

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