Primary Market Research vs Secondary Market Research: Key Difference

Do you know a foolproof way to establish a successful business? Research. A thorough, well-thought, supervised research.

No matter how much money you spend on building your products, services, and advertising, you will never get the result you want unless you know why you are doing it and what factors can change your game.

Conducting market research is the only way to know these parameters. It saves businesses a lot of time and money and helps them make data-driven decisions and strategies to maximize their growth and sustainability.

So, without further ado, let us take a look at the two most common research methods, primary and secondary, how they can impact businesses, and the key differences between Primary Market Research vs Secondary Market Research. 

What is primary market research?

Primary market research is the process of gathering new, original data directly from various sources such as customers (existing and potential), suppliers, sellers, and anyone involved with business firsthand. This kind of research is conducted from the ground up rather than relying on existing data and sources.

Primary market research is conducted to gain first-hand insight into a specific problem or issue requiring in-depth analysis. It is the most relevant and up-to-date market research that enables businesses to have full control and ownership over data and thus make data-driven decisions.

Types of Primary Market Research

There are mainly 2 types of primary market research.

• Quantitative market research
• Qualitative market research

1. Quantitative market research

Quantitative primary market research refers to the process of collecting data that can be measured and analyzed statistically and numerically. Its main purpose is to view data statistically (such as charts, graphs, etc) to easily gain insight into behaviors, attitudes, opinions, and repetitive patterns.

It is done mainly by using questionnaires, surveys, experiments, field trials, and observational research.

Example: Measuring the customer satisfaction score (CS) in call centers.

2. Qualitative market research

Qualitative primary market research refers to the process of collecting non-numerical or descriptive data to explore perceptions, reasons, and behaviors in depth to optimize upcoming strategies.  

It can be done by gathering data from interviews, focus groups, ethnographic research reports, diary studies, etc.

Example: Understanding customer motivation for brand loyalty.

What are the Sources of Primary Market Research?

First-hand data, i.e., original data collected for primary market research directly from specific sources, is the main source of data. Most of these data are collected in person or are highly personalized.

1. Surveys and Questionnaires

Surveys are conducted on a large number of people online or out in the field to capture data on customer preferences, behavior, satisfaction, attitude, motivation, and so on. It is commonly done using questionnaires and interviews.

2. Field trials

Field trials, also known as pilot testing, are done by placing a new product in a few selected locations to observe real-world usages and customer responses. This is done to identify any operational and market-related issues before a broader launch. 

3. Social media polls and discussions

In this digital age, social media monitoring is absolutely vital to gather real-time, first-hand, and unfiltered information and customer responses on current trends. Businesses can use social media platforms to conduct informal polls and monitor customer conversations and comments on their social media pages to understand customer sentiment and preferences.

4. Experiments

Valuable data can be obtained by conducting controlled experiments. These experiments can help determine which variable (price, product feature, etc.) influences the market more and why. 

For example, Products A and B can be subjected to the same tests to see which one performs better and how we can overcome the shortcomings.

5. Ethnographic research

Ethnographic research refers to the in-depth study of participants in their natural environments to understand the lifestyle factors and cultural influences on purchasing behavior. 

Businesses can use the data obtained from this kind of research to tailor their services according to the specific region and diversity.

What is Secondary Market Research?

Secondary market research, also known as desk research, is the process of gathering and analyzing data from secondary sources such as research journals, government agencies, media outlets, industry reports, etc. 

The data used for this kind of research comes from a wide variety of sources and is vast. Thus, it must be filtered out and prepared specifically for the current study’s purpose.

It is more cost-effective and time-consuming than primary market research, making it an excellent way to gain a comprehensive understanding of the overall market landscape.

Types of Secondary Market Research

Secondary market research can be mainly classified into two types:

• Internal secondary market research
• External secondary market research

1. Internal data market research

Internal secondary market research refers to the process of analyzing data already available within the company but is not collected specifically for the current research project. 

The data can be obtained from sources such as customer service logs, website analytics, call analytics, CRM data, financial statements, past marketing campaigns, previous research, etc. The data obtained is vast and must be filtered out to work with specific categories.

This kind of research is mainly done to gain insight into a company’s performance, customer behaviors, company-specific trends, product performance, etc, to help businesses make informed decisions and weave effective strategies.

Example: Reviewing past customer purchase data to understand the common buying pattern.

2. External data market research

External secondary research refers to the process of gathering data from external sources such as government agencies, public companies, research firms, industry reports, and so on.

It is mainly done to understand the overall market conditions, competitor activity, industry trends, and consumer behavior on a global scale.

Example: Analyzing the industry reports to better understand economic and demographic changes and rising demands.

What are the Sources of Secondary Market Research?

The sources for secondary market research are publicly available or must be purchased. The various sources for secondary market research are as follows:

1. Industry reports

Various kinds of survey data and detailed reports from a particular organization, company, industry, and research firm serve as data sources for competitor analysis and market trends.

2. Academic journals and research papers

Academic journals and research papers published by various organizations, research institutions, universities, as well as individuals provide valuable insights into consumer behavior, patterns, industry trends, and more.

3. Business and financial reports

Financial statements, annual reports, and investor presentations from public or renowned companies often provide information about current industry dynamics and effective business strategies.

4. Media and news outlets

There are plenty of national and international reputable news sources such as Bloomberg, Reuters, Financial Times, etc, that report on economic development, market trends, and competitive activities. Businesses can use these to better understand their current positions and next steps.

5. Government publications

Various government bodies, such as Chambers of Commerce and Trade Associations, Census Bureau, Eurostat, Bureau of Labor Statistics, etc,  provide economic indicators, labor statistics, trade data, national census data, and many more, which businesses can use to gain reliable, comprehensive, and effective insights.

Primary Market Research vs Secondary Market Research

The major differences between primary market research and secondary market research are as follows:

Knowing the differences between these two makes it easy to understand when and why to use each type of market research.

Final Words

Primary market research vs secondary market research both approaches complement each other perfectly well and are equally vital. Both kinds of research provide broad as well as specific insights and a detailed understanding of the question at hand. Together, they offer a comprehensive view of consumer behavior and market dynamics. Thus, businesses must leverage this kind of opportunity to their full extent. 

FAQs

What is the main difference between primary and secondary research?

The main difference between primary and secondary research is that in primary research, data is collected directly from primary sources. In contrast, in secondary research, data collected is the existing data previously collected by other sources.

Can primary and secondary research be combined?

Yes, primary and secondary research can be effectively combined, and doing so enables companies to leverage the strengths of each approach to actively understand the comprehensive view of the market and target audience.

Which research type is more cost-effective?

Secondary research is generally more effective than primary research because the data to be collected already exists, and so fewer resources must be spent on new data collection. Most companies rely on secondary research to obtain the data and then fill any critical information gaps with primary research.

What are some examples of secondary research sources?

Some notable examples of secondary research sources are:

• Government reports
• Public health records
• Public archives and libraries
• Market research reports
• Social media analytics
• Industry Association publication
• Subscription databases

What is an example of primary market research vs secondary market research?

Here is an example of primary market research vs secondary market research done by a company to acquire new products. 

Secondary market research

The company studies existing consumer data such as purchasing trends, preferences, etc. It also studies competitor performance, how similar products are positioned in the market, pricing strategies, and customer reviews.

Primary market research

The company gathers a group of participants and conducts surveys on consumer expectations and feedback. Once the product is made, surveys are conducted to test product satisfaction, quality, and brand fit.