Sources of Secondary Market Research

This blogpost will talk about Secondary Market Research. The starting point is that it plays a critical role in Market Validation – which I describe as using Secondary and Primary Research to continually test your market opportunity. Also known as desk research, it is vital in making decisions within business – I am always amazed at the secondary information which is out there!

Market Validation is a systematic approach to probe, test and validate your market opportunity – before you invest significant money in product development. It lets you understand what customers really want, allowing you to tailor your product offering to meet their needs and giving you a real competitive edge.

If You Build It Will They Come? Three Steps to Test and Validate Any Market Opportunity Rob Adams (Wiley, April, 2010)

Marketing Research is hugely important for the promoters of new business endeavours to include: new products; geographic or market expansion of an existing product; or start-up businesses.

So once you have decided what information you would like to have (see bulleted list) it is time to identify how this information can be sourced. There are two main sources of data – primary and secondary.

Primary research is conducted directly by or on behalf of the business. It is original and collected to solve the problem in hand. Secondary research, also known as desk research, already exists since it has been collected for other purposes. Secondary research can provide both quantitative and qualitative information. Qualitative information involves describing meaning, rather than with drawing statistical inferences. It provides more in depth and rich descriptions.If the information involves a measurement of any kind, it is considered quantitative information.

Required Information – Some examples

– Market Size and Trends plus Customer Profiles including Demographics

– How customers use my product? Alternative solutions used by customers

– Competitors & Market Share

– Competitor Marketing Mix

– Power of Suppliers

Secondary research reports can be expensive. However, extracts and summaries may be found online. Enterprise Ireland (and the LEOs) has developed a significant databank of information across industries, markets and sectors. They may have purchased professional market research reports on the particular sector being researched. These are particularly valuable for international market research. Reports compiled by organisations such as Frost & Sullivan, Mintel, IDC, Euromonitor, AC Nielsen and Forrester can contain valuable information for decision making.

For the Irish market, there is a range of reports compiled by Irish State Agencies, primarily the CSO, many of which are available online at no charge. Websites of sectoral agencies such as Coillte, Failte Ireland, SEI and An Bord Bia are also worth investigating. Specifically:

– Central Statistics Office (CSO) publish many reports to include the Household Budget Survey and Census Statistical Yearbook

– National Associations such as the Coeliac Association of Ireland can be another source of information.

– My post, Customer personas, who rules the roost? references the The Bord Bia document, ‘Irish Foodservice: Channel Insights November 2013‘ as a must read for anyone in the foodservice business.

Eurostat is the European Statistics Office. Professional Associations and Trade Bodies may also have published reports. Some of these will be available only to members.

Other international websites include:

► Office for National Statistics (ONS) in the UK (www.statistics.gov.uk)

► InterTrade Ireland (www.intertradeireland.com/researchandpublications/trade-statistics/)

► Enterprise Ireland’s TechResources directory for Irish tech companies entering the US market.

A most interesting source of EU market information is provided by CBI, the Centre for the Promotion of Imports from developing countries, funded by the Netherlands Ministry of Foreign Affairs. It has a super market information section on a range of sectors such as Food, Consumer Products, Industrial Products, and Services – tailored for those in developing countries who wish to import to Europe

Information on companies (including limited financial information) can be sourced from Companies Registration Office (CRO) . Directories such as Thoms and Kompass also provide information about companies (customers/suppliers) sorted by company name, product sector, industry sector, and location. And don’t forget the Golden Pages (online) in this regard.

Starting out, it may be difficult to identify sources of information. But I am always amazed at the information that can be collected and the expertise that business promoters gain from operating in a market over time.

For example, a few years ago we looked at the preschool children book market, and learned that:

– There are 178,213 children aged between 3 and 5 in Ireland. (Source: Census 2006)

– Irish Publishing Market is growing ‐ Total Market Sales has increased by 9% (Source: Irish Book Publishing Survey 2005.) The report gave figures for total market size of retail sales of books and breakdown by category. Educational books accounts for approximately 80% of all children’s books.

– UK market for children’s books was worth an estimated £775.8m at manufacturers’ selling prices in 2007. This represents an increase of 2.9% on the previous year. (Source: Children’s publishing market assessment 2008 available from www.marketsandmarkets.com)

You may find that information is available on the UK market which can prove interesting in forming assumptions about the Irish market.

I also researched the boardgame market in Ireland, the UK and the US about 18 months ago. [all of this was freely available online].

– In 2005, Games and puzzles accounted for 4.1% equivalent to approximately €11.4 million of the Traditional Toys and Games market which was valued at €279 million at retail prices as estimated by industry sources.  In that year, the average expenditure on toys and games per child in the age group of 0-14 years was €326. This is higher than the EU average of €168.

– In the UK, consumption of traditional toys and games reached €2.7 billion in 2005, an annual increase of 4% compared to 2001.  The UK is the largest market in the EU, with a share of 24%. Imports totaled €689 million, increasing by an annual average of 7.8% since 2001. Games and puzzles were valued at £388 million being 12.3% of the UK market.

– The most recent data was available on the US Market. For the 12 months ending July 2009, the US toy industry tallied $21.6 billion in sales. Among specific toy supercategories, Games and puzzles were up 5 percent for 2009’s first half (helped by a 10 percent gain in board game sales) and up 2 percent for the 12 month timeframe. (Main reason given is that board games are cheap and provide value with hours of fun during recessionary times).

A useful online tool for secondary market research is Google Adwords. Their keyword tool is fantastic for finding out what keywords people are searching for and how many times a keyword and related words are searched for in a geographic area. For example, as a Business Advisor I would like anyone interested in starting a business in Ireland to find this website. Google Adwords can tell you that there were 4,300 searches in February 2011 in Ireland across 44 searchwords related to Business Startup. The top ten keywords: business startup, business startup funding, business startup ideas, business startup grants, small business startup, business startup loans, small business startup loans, business startup loan, small business startup grants, and business startup checklist accounted for 1,900 searches.

Key tip: Advanced Google Search

Google has a great tool within Search called Advanced Google Search. This can allow search for specific keywords and long key phrases with the results limited to PDFs. If someone has created a pdf it will generally be a substantial document and many include useful market information. It can take a few hours to find out if there are documents online that may be useful.

So if for example one googles ‘compost market ireland’, a range of reports will be sourced. There is a very detailed report from 2012 entitled ‘Market Report on Irish Compost Production and Use‘.

Summaries of reports on sites like MarketsandMarkets.com and MarketResearch.com can be very useful starting points.

The sources of information that will be relevant to your business will be very specific to each market opportunity. It takes time to find the information. The next step is to distil the information that you need to share with others and for decision making.

The major advantages of using secondary data in market research are time and cost savings:

► The secondary research process can be completed rapidly. When secondary data is available, the researcher need only locate the source of the data and extract the required information.

► Secondary research is generally less expensive than primary research. The bulk of secondary research data gathering does not require the use of expensive, specialized, highly trained personnel.

There are also a number of disadvantages of using secondary data. These include:

► Secondary information pertinent to the research topic may not be available. Much secondary data is several years old and may not reflect the current market conditions.

► Data may be in a different format or units than is required by the researcher.

► Some secondary data may be of questionable accuracy and reliability.

Secondary research is hugely important for both consumer and business-to-business (B2B) market research. Secondary research lays the groundwork and primary research helps fill in the gaps. By using both types of market research, business owners get a well-rounded view of their market and have the information they need to make important business decisions.

The broad objective of a business plan is to chart an action plan for the company. They generally have specific objectives to include: seek investment from private investors, secure bank finance or encourage key employees to join the company. Demonstrating expertise and knowledge of the market is a critical ingredient of business plans.

To conclude, marketing research should be conducted on an ongoing basis. Developing a process of ongoing secondary data collection is an important part of the marketing function. Subscription to trade magazines and attendance at trade shows to meet with collaborators/competitors are two elements of this process.

As always, comments are appreciated – particularly those that mention sources of information not included in this article.

Best regards

donnchadh (@donnchadhh)