If you're starting a new business, launching a new product, or opening a new location for your large or small business, market research is essential for your success. There are two core forms of research: primary research and secondary research.
Primary research is designed to meet your unique and specific needs. This fundamental research is conducted by you—if you're on a tight budget—or by a research firm that you hire for the project, usually a firm that comes recommended by a colleague. The research can include focus groups, surveys, interviews, and observations.
Unlike other forms of research, where you apply the work of others to your business, primary research aims to answer questions relevant solely to your company. For instance, if you are launching a new website and want feedback regarding its design and efficacy, the research firm you retain would share the site with focus groups in order to gauge their responses to the website. This works well because strangers have no vested interest in your website.
Primary research gives you a lot of specific results. For example, a focus group would be asked specific questions that you help design so the information is very targeted to your needs. Also, the research firm would use statistical models to come up with a sample group that is representative of your target audiences, making it very relevant to your business needs. Primary research provides two basic forms, exploratory and specific.
Exploratory research does not aim for specific results or data points. It is more open-ended. It can help you identify problems and usually involves interviews or focus groups with extensive input from participants. For example, if you noticed your website was not producing any sales and you chose to interview users to determine any problems, they might say they found it hard to navigate the site or they found it overwhelming and too content-heavy.
Specific research is very targeted in its scope. It is used to solve any problems that you discovered through exploratory research. Specific primary research routinely involves interviews and is very precise. In the example of your website, once the exploratory research identifies the problem, that your website sales decreased due to difficulties navigating the site, you would use specific research to test reactions to a new layout that is easier to navigate. One major downside to primary market research is cost. Conducting a study yourself or hiring a research firm can cost thousands of dollars, making it too costly for many small business owners.
Secondary Market Research
Secondary market research is when you use previously completed studies and apply the results to your own situation. These studies are easy enough to find via an internet search or by researching marketing journals and, on the upside, are usually free or low cost. The drawback for businesses is that the results are not specific to your business, and you may not be aware of all of the variables involved. The results may also be broader than your company's niche, making it difficult to help inform your business decisions.
What Kind of Research Should I Use?
For many business owners, the best approach is to start with secondary research. By looking at regional data, community surveys, and other available information, you can help identify your audience and market. Once you have narrowed down your target group, you can do lower cost versions of primary market research, such as sending out surveys or questionnaires. Secondary research gives you a foundation on which to build, while primary research helps you identify specific needs.