WHAT IS PRIMARY MARKET RESEARCH?
Here is the short answer; Primary Market Research is the process of gathering relevant data, directly from the stakeholders in a potential market. It is the first-hand market research conducted by your business or by a market research agency you hire to unearth key consumer intelligence.
Primary Market Research is one of the first and the most important things to get done right if you are planning to launch any kind of business or your existing business is expanding into new markets.
Want to know more? Well then, keep reading..
Let’s start from the place where any great business starts. A sizable capital investment? No! An Idea! So you had one those ‘if only there was something out there that did this’ product ideas, and know you are capable of developing that very same thing. You are excited and have a great hunch that your product will sell. But there lies the issue. It is merely a good feeling that is backed up with almost no data about the actual requirement in the market. Are you willing to dig deep into your pockets and start off without knowing answers to questions like; What is the market size and how is that distributed geographically? Who are your actual competitors? What kind of Customer Acquisition Cost would you have? Will the sales be seasonal? Would anyone else even share your sentiment, that this product will change the world?
Well, if you dive in without knowing at least some of the above, I wouldn’t say that you will fail… But the odds that your product will be successful, will probably be slimmer than the new MacBook Air you were planning to buy from the profits of your new venture.
Primary vs Secondary Market Research
So, how do you go about doing this research? There are two ways to do so; One way is by using existing information to make your decisions. We live in the times where a vast amount of information is freely available for those who have the patience and time to just look. Governments and businesses already have collected and compiled information regarding a vast range of topics and fields. This type of Market Research is called Secondary Market Research. However Secondary Market Research, although much cheaper (and even free) might not be the best solution for most businesses. For example, if your super idea was ‘never-fading-black-tshirts’ to the goth communities across the USA, well, the government just might not have accurate statistics about that demography!
On the other hand, Primary Market Research would be a better way to get accurate information about that particular demography. While the methodologies used for Primary Market Research would take longer and be more expensive, this will ensure that your business will not crash and burn shortly after launching, because, you simply did not have accurate information.
Primary Market Research Methodologies
Okay, so you are convinced that you don’t want to risk burning through your life savings, making decisions on vague data that others have collected. How do you go about getting the information straight from the source?
Well, these are some of the tools used for primary market research.
- Focus Groups
- In-depth Interviews
- Market Research Online Communities
- Creative Testing
- Online Discussions
- Shop Alongs
- Home Use Tests
While some of the above are self-explanatory and others need a bit more clarification, each of the above will need a moderate level of time and expertise to be done effectively.
Let’s take one of the most straightforward methods of gathering information and feedback; a survey. From quirky online surveys that pop up every now and then while you are mindlessly scrolling on social media, to the one that you filled out for your friends MBA dissertation, to the one that you carefully filled about your health during the recent COVID pandemic, you would have had plenty of experience with filling out and even sometimes even creating surveys. Seems simple enough, yes? Well, maybe. But when creating one for primary market research, it is important to develop one with an understanding of the consumer psyche and be able to identify a precise quota sample with the ability to reach them, to execute an effective survey.
Then there are tools such as ethnography, which is the study of people (consumers) in their own environments. This requires a team with a strong understanding in sociology and anthropology with the ability to be physically present in the relevant marketplace. As you might imagine, this is one of the most effective ways to gather great quality information.
Should I do my own Primary Market Research?
The answer to this is very simple. It is the same as; should I build my own house? Well, if it’s a small tree house in your back yard, yes you probably should. It’s a fun project and you won’t be living in it anyway! But if it’s your dream home with three bedrooms and a pool, you should probably get a team of professionals involved!
Likewise, Primary Market Research should ideally be handled by a specialized team or business, so it can be done in the shortest most cost-effective way possible.
We recommend Secondary Market Research for smaller businesses without the ample resources to carry out Primary Market Research.
How much will Primary Market Research cost? And how long will it take?
As mentioned earlier, there is no debate on the fact, that Primary Market Research is the most effective way to gather information about a market. However, two of the key deciding factors of choosing this will are the cost and time line.
Well, these are both very subjective, due to the countless number of variations in the scope of a project. Keeping this in mind, it is a good estimate to expect to spend between USD 20,000 – USD 50,000 for Primary Market Research job.
The length of time can range from one month for a smaller project, up to 3-6 months for a larger scale research project.
Although the above cost may seem a little steep and you may debate if pushing back your product launch is really worth it, this will help save you from disasters like even established brands like Pepsi, Kodak & Colgate have faced, due to the lack of market research or not adapting their business according to the data gathered from the research.
If you need any more information on what is Primary Market Research and have a requirement for the same, please do drop us a line here!