Download Secondary Research and more Study Guides, Projects, Research Marketing in PDF only on Docsity!
Secondary Research
S
econdary market research refers to any data gathered for one pur- pose by one party and then put to a second use by or made to serve the purpose of a second party. Secondary market research is thus the broadest and most diffuse tool within the toolbox, because it includes virtually any information that can be reused within a market research context. Secondary research is also the closest thing to an all-purpose market research tool, because virtually every project makes some use of secondary data and almost any decision stage may incorporate some kind of secondary research. As a general rule, relatively speaking secondary research also is the cheapest and quickest form of market research. You ignore or skimp on it at your peril. Its range of applica- tion is limited only by your ingenuity. It is helpful to distinguish between internal and external secondary research. Internal secondary data consist of information gathered else- where within your firm. The major categories include (1) sales reports, (2) customer databases, and (3) reports from past primary market research. Sales reports generally give data broken down by product cat- egory, region, and time period. More sophisticated systems also give breakdowns by distribution channel, level of price discount, customer type (large, medium, small), and similar categories. Customer databases might include a recording of brief descriptive data on all accounts (industry, contact person, phone number, purchase history); a log of tech support or response center calls; a record of specific products pur- chased; and the like. Records of past primary market research include results of surveys and focus groups conducted in prior years, accumu- lated customer visit trip reports, and so forth.
53
External secondary research includes (1) information gathered by government agencies such as the Census Bureau, (2) information com- piled for sale by commercial vendors, and (3) various kinds of public and quasi-public information available from diverse sources. Govern- ment agencies collect an enormous amount of demographic (e.g., the Census Bureau) and economic trend data (e.g., federal and state depart- ments of commerce). In recent years the United States government has also done more to help companies seeking to export by providing infor- mation on overseas markets. Entire volumes are devoted to simply list- ing and cross-referencing various government reports. An important kind of secondary data available from commercial vendors is known as the syndicated report. For a syndicated report an analyst compiles a variety of data, using libraries, databases, phone calls, and even some primary market research such as interviews or surveys, in order to address a topic such as trends in the in-home computer net- working market, 2005–2008. The goal is to sell the report to as many network equipment companies as can be persuaded to buy. Syndicated reports may be one-time efforts or may appear periodically. Because the appetite for data is so huge, especially in technology markets, a whole industry of syndicated report vendors has grown up to satisfy this appetite. These commercial vendors function as one part librarian, one part statistician, one part detective, and one part proxy market researcher. They employ analysts who are in the business of being industry experts, and a certain number of hours of these analysts’ time can be purchased along with the vendor’s reports. Public and quasi-public data sources include anything published in a magazine or newspaper. Most industries have a few trade magazines devoted to coverage of companies, events, and trends. A few industries, like the computer and telecommunications industries, are the focus of a slew of publications. Similarly, most industries of note are, on occa- sion, the subject of a feature article in the Wall Street Journal, New York Times, Los Angeles Times, or other respected newspaper. Trade associa- tions, university survey research centers, nonprofit agencies, and others publish data from time to time. With the spread of computerized infor- mation retrieval services (everything from the traditional Dialog to the Web) it has become easier to bring together data from a wide range of sources and publications.
54—THE MARKET RESEARCH TO OLB OX
the lookout for specialized resources—services that compile statistics, bulletins that bring together articles from a variety of trade publica- tions, and so forth. Finally, a good library keeps up with new technol- ogy for collecting and distributing information, such as electronic clipping services, wherein a semi-intelligent agent searches for articles meeting a profile set up by a user. Phrases like the Information Society and the Data Explosion are not hype when it comes to secondary data. It’s a full-time job keeping up with the proliferation of sources of secon- dary data, and successful firms hire librarians or outsource to consul- tants who can do this.
- Provide appropriate consultation services. Whether located in the market research area or the corporate library, one or more persons have to serve as reference librarians who can proactively help a manager find relevant resources rather than simply responding to queries. Inasmuch as most market research vendors provide several hours of their analysts’ time when reports are purchased, the reference librarian is also the log- ical choice to serve as gatekeeper to these analysts. Without a gatekeeper, the few hours of analyst time may be frittered away. Lastly, whether in-house or out-sourced, the library should make available a profes- sional database searcher—someone who can quickly devise and execute effective search strategies of electronic databases.
BRING THE LIBRARY TO THE DESKTOP
Because more and more information is available in electronic form, and because information in hardcopy form is in any case a problem for multinational and decentralized firms, in the future most if not all of the corporate library will have to be made accessible from the desktop computer of the individual user. Most major firms had already made substantial progress toward this goal by the mid-1990s. An important part of desktop access is proactive posting of infor- mation by the library to the individual user. Generally, users sign up for certain e-mail aliases (i.e., they put themselves on the distribution list for certain kinds of e-mail) and the library regularly pumps out the appropriate information to the various aliases. This might include recent library acquisitions, types of bulletins now available, and so on.
56—THE MARKET RESEARCH TO OLB OX
EVALUATE SOURCES OF INFORMATION
Quality can vary dramatically across vendors, and also within vendors depending on particular areas of expertise. It behooves any substantial purchaser of these reports to periodically evaluate the strengths and weaknesses of each research vendor based on past experi- ence, and to make these evaluations available for consultation by project, product, and program managers.
Steps to Be Taken for a Market Research Project
IDENTIFY RELEVANT LIBRARY HOLDINGS
Early in the environment scanning stage you should budget some time for reading and browsing in the library. For example, you may try to construct graphs of trends in sales or market share by assembling a series of syndicated reports. For a second example, reading a set of reports interpreting industry events will help to constellate key issues in your mind.
ASSEMBLE RELEVANT INTERNAL SECONDARY DATA
Using data from within your firm, you may be able to produce illu- minating breakdowns of where sales performance has been strong or weak, profiles of typical customer applications, segmentation analyses of your customer base, tabulations of reported problems and com- plaints, and so forth. If you can assemble past primary market research reports that address, however tangentially, your area of concern, then you may gain perspective beyond what you obtained from reading outside analysts’ discussions.
DECIDE ON A SEARCH STRATEGY
If the scope of your project justifies it, you may want to mount a search of databases, or sign up for a consultation with some market research analyst. You would go this route, for instance, if you were a product manager charged with preparing a backgrounder or white paper on whether the firm should expand into a particular market or pursue product development in a specific direction. In such instances,
Secondary Research—
or some more complicated search routine, that can be run against a database on a periodic basis (once a month or once a quarter). Here are some examples that would be relevant for a typical product manager: (1) mention of either of your two largest competitors or their important brands in any of several leading periodicals; (2) mention of the words “new” or “introduce” in conjunction with the name of your product category; (3) mention of any of the several major applications for your product (it will take practice to specify this search tightly enough); or (4) mention of the words “trend” with “market share,” “sales” or “profit,” in conjunction with your industry or product category. This kind of search tends to yield articles that you really want to read, and receiving such highly relevant articles in turn reinforces the habit of making regu- lar forays for market intelligence.
BUILD MENTAL MODELS OF YOUR MARKETS
I would imagine that almost every product, project, and program man- ager already engages in a fair amount of reading. The point to remem- ber is that you will read with greater understanding and enhanced recall if you read actively —meaning that you read with reference to mental models that you are trying to build, test, modify, or rebut. A manager once remarked to me that he thought the real shortcoming of American managers was that they did not put enough energy into constructing conceptual models of the driving forces and key factors within their industry. I have no way of proving or disproving this criticism. I do know that your reading will be more rewarding if it is done with refer- ence to mental models you have built and modified over time. In the market intelligence mode, it is best to keep these models simple and basic. I have in mind core statements that reflect what you think you know. Here are some examples in generic form.
- Competitor X’s biggest advantage is... its biggest shortcoming is...
- Customers of type Y place the greatest importance on...
- There are Z major types of customers in this market. They are distin- guished by...
- Our major strengths in the marketplace are... Our significant weak- nesses are...
- Decision A was successful because... Decision B failed because...
Secondary Research—
Of course, the reality of professional life is that the activity of just reading is the kind of activity that inevitably drops toward the bottom of your to-do list. Searching for information that refines, deepens, or extends your model of what’s really going on may yield the motivation needed to persevere.
Examples
Because of the diversity of secondary research, some typical applica- tions will be given in place of specific examples.
Sales and market share analysis. Analysts compile data and do detective work to estimate market shares of key competitors, including breakdowns by application, by product subcategory, by region, by customer industry, and so forth. As part of this analysis, sales trends, including growth rates, are discussed. Trend analysis. Often the goal of a report is to go beyond collecting and reporting specific numbers to encompass interpretation and analysis of underlying dynamics, critical success factors, implications of recent events and decisions, and the like. Customer segmentation. Reports may suggest a variety of schema for distinguishing and grouping various types of customers, and discuss the particular needs and requirements of each segment. Competitor analysis. Reports may dissect and critique business and marketing strategies of key competitors. Analyses will indicate strengths and weaknesses of products, and describe markets where each competitor enjoys advantages or suffers disadvantages.
Strengths and Weaknesses
An important strength of secondary research is that it is generally quickly available for a modest cost. This is no small advantage in many business situations. Moreover, as discussed earlier, it is difficult to do any kind of primary market research for less than $10,000. If a few days in the library can remove most of the key uncertainties about market facts, albeit without giving exact answers to all one’s questions, this may save you tens of thousands of dollars. The key fact about secondary research, then, is that it already exists and is readily available. At a
60—THE MARKET RESEARCH TO OLB OX
unexamined assumptions. Most large buyers of secondary data develop a sense for which consulting firms are strong (or weak) in a particular area. This judgment may be explicit in documents prepared by corpo- rate staff, or implicit and locked in the heads of employees who work with these vendors on a regular basis. It behooves you to tap into this collective wisdom before spending large amounts of money or basing crucial decisions on a consulting firm’s data. In general, when reviewing a report you have to carefully examine the appendix describing study methodology, and come to your own judgment about study quality. If there is no methodology section to examine, or if the sampling proce- dure is never explained, then beware! A weakness characteristic of internal secondary data such as sales reports and customer databases is that they describe only your existing customers. Do not assume that these data can be extrapolated to describe the market as a whole. Rather, there is every reason to believe that your customers do not exactly reproduce the characteristics of the total market. Be careful of data that may be dated or too old. Technology markets often change rapidly. Lastly, be aware that secondary data are less likely to exist outside the United States. Particularly in Asia and in developing countries, the secondary data that you’d like to have and could reason- ably expect to find in the United States or Europe may simply not exist.
Do’s and Don’ts
Do ask your colleagues’ opinions of specific vendors’ performance. Don’t take numbers in syndicated reports at face value. Read the appendix and consider the methodology used. Pay particular attention to how samples were gathered and always maintain a healthy skepticism. Do triangulate across vendors. Compare numbers gathered from different sources by different methods. Often the truth lies somewhere in between. Don’t try to absorb a mass of secondary data all at once. Develop habits of regular reading; keep a notebook devoted to insights, reminders, and mental notes about possible models.
62—THE MARKET RESEARCH TO OLB OX
Suggested Readings
Patzer, Gordon L. 1995. Using Secondary Data in Marketing Research: United States and Worldwide. Westport, CT: Quorum Books.
Stewart, David, and Michael Kamins. 1992. Secondary Research: Information Sources and Methods, 2nd ed. Newbury Park, CA: Sage. Both of these books provide a comprehensive guide to choosing and using secondary research. Stewart has more extensive examples of the strategic use of this information, whereas Patzer adds an international focus.
2004 Greenbook. 2004. New York: American Marketing Association, New York Chapter. The most comprehensive guide to market research suppliers and service providers, updated annually.
Finally, all market research textbooks have a discussion of secondary research (e.g., the Churchill and Malhotra volumes listed at the end of Chapter 2), and the most recent edition can be consulted for up-to-date lists of data sources.
Secondary Research—
up to its maximum potential of near-instantaneous screen replacement?) The fact is, flipping paper pages can be much faster than refreshing page access on a computer screen. The advantage of perusing a paper vol- ume, assuming it has a table of contents, an index, and makes good use of headings and titles, instead of searching an electronic version on screen, can be substantial. The advantage of paper is greatest when undertaking a fuzzy search (i.e., when you can recognize useful data when you see it, but can’t necessarily formulate the object of your search in any precise way). The first principle of search, then, is that paper can be searched too, and that searches of paper sources can sometimes be more effective than searches of electronic data. Don’t fall prey to the silliness (a linger- ing remnant of the dot.com boom time) that treats information-on- paper as some kind of medieval entrapment to be avoided at all cost.
Principle 2: Not all electronic data are freely accessible via the Web. Corollary 2a: Search specialized sites, not just Google.
Although more and more data are stored in electronic form, the owner of the data does not always make it publicly available. A typical example is the archives of past issues that print publishers maintain. Here the data are stored in electronic form, and are searchable, but these data are not searchable from Google or any other search engine. These data can only be searched from within the publisher’s site. The cover page or entry point to the private database may be located through a search engine, but the actual contents cannot be searched by means of the search engine–the spider or other program used by the search engine was never allowed to index the contents of the database. There are all kinds of reasons why private databases will continue to exist walled off from Web search engines. The owner may wish to charge a fee for access (as in the case of the print publication’s archives), security considerations may make it undesirable to allow indexing of the data- base, data format issues may make this difficult, and so forth. The practical implication is that when you are searching for a par- ticular kind of specialized information, Google (or any other Web search engine) may not be your best bet. Instead, you need to locate the appro- priate specialized database that can then be searched. Sometimes Google can tip you off to the existence of a specialized database; sometimes you
Secondary Research—
can ask a librarian; and sometimes, this knowledge is something you acquire by experience. An example may be useful. Suppose you want to find the consumer magazines with the highest circulation among males. Put another way, you are looking for the most cost-effective way to reach millions of male magazine readers and want a list of likely magazines for further investi- gation into costs, etc. If you had followed principle 1, then your librar- ian might have directed you to one of the paper volumes published by Adweek or SRDS, which would contain such a list. If you were new to media planning and unaware that such compilations of circulation data have been published in print for many years, then you might attempt a Google search. Let’s see how that might play out. The first question is, What search string should you use? Some possibilities might include the following:
- “Which magazines have the most male readers?”
- “Magazine circulation male female 2004”
- “Magazine circulation data”
- “Magazine circulation”
The first string might be characterized as a natural language query–you phrase the search string just as you would ask the question of an expert if one were available. However, when attempted in summer 2004 on Google, this string failed to produce any useful links on the first page. Although search technology is moving toward being able to handle natural language queries, in this case Google throws up sites that have one word (“magazine”) or another (“male”), but there don’t appear to be many sites that have all these words, and none of the top links was relevant. Now consider the second search string. You might have said to yourself, what I’m really looking for is a table of some kind–let’s search on the sort of headings that such a table would have. Unfortunately, what this string turns up is circulation data for individual magazines; the top links do not yield a site comparing multiple magazines. When you don’t succeed with your first one or two attempts, it is generally a good idea to rephrase your query a couple of times, using different rules. As an example of a rule, if you started with a long search string, simplify it; if you started with a simple string, add some more
66—THE MARKET RESEARCH TO OLB OX
dead end; try another string, which does produce an interesting site, which doesn’t have what you want, but gives you an idea for a different search string or a different source to consult; which finally yields the information you seek.
Summary: Search Strategy for Secondary Research
- Ask a librarian (or review your own experience) to see if an appropri- ate print reference exists. (The quickest way to solve the example ques- tion would have been to open Adweek’s Guide to Media, consult the table of contents, and open the book to the desired table. If you rou- tinely worked with media data, some such book would have been on your shelf.)
- If no printed reference work exists, inquire as to whether there are rel- evant trade magazines that might be expected to publish these data. If so, search first on their Web sites. (Again, information stored in a data- base may not be accessible from the public Web–you only detect it if you get to the Web site and use that Web site’s own search function.)
- If steps 1 and 2 fail, attempt a search of the Web using Google or a similar engine. Here, type the first reasonable query that pops into your head. (It is surprising how often this is successful.) If at first you don’t succeed, try the following strategies, in roughly this order: (a) vary the search string; (b) look at second, third, and fourth pages of links; (c) take the best links and see where they lead; (d) try a meta- search engine or a directory like Yahoo; and last, (e) sleep on it. A dif- ferent and better search string is most likely to occur to you if you step away from the problem for a while.
68—THE MARKET RESEARCH TO OLB OX
