Disadvantages of secondary market research

Secondary market research is information that already exists because another person or organisation collected it. It can save an enterprise from gathering data first-hand, but it has drawbacks.

Out of date or inaccurate

The information may have been published a while ago, and customer habits, prices and technology change. An old report could point a business towards a product or price that no longer works. It may also be inaccurate if the original organisation made mistakes or left gaps in the data.

Gathered for another purpose

The data was collected to answer someone else's question. National figures for all leisure spending, for example, do not tell a local climbing centre what teenagers in its town would pay for a session. Even when the data covers the right industry, it may cover a much wider market, so it is not specific enough to answer the exact question the enterprise set out to research. A business wanting to know whether people in one town would buy a new product may find only country-wide averages.

Bias and cost

Bias means the information is one-sided because the collector has a reason to present it that way. A trade magazine funded by equipment manufacturers might highlight success and play down complaints. Cost is another drawback: although some secondary data is free, specialist research companies charge for their reports, and a detailed one can cost hundreds of pounds — a real problem for a small start-up.