Many small- and medium-sized companies will not have a substantial budget for conducting international trade research. These companies will often rely on secondary trade research as much as possible.
Most SMEs will perform the majority, if not all, of their research in house by using published sources and the Internet.
This type of research is called desk research and it involves obtaining secondary data (existing data that have already been collected for some purpose).
Whatever the size of the company, researchers should always start planning their research design by investigating whether any information can be sourced from within the company; for example, by finding information stored in company records, by talking to customers or distributors or by asking employees who have worked in a potential target market for information. However, most secondary data sources are external.
There’s a world of secondary data at your fingertips
Internal records and information from internal experts:
Sales and accounting records – can be used to determine baseline comparisons of trends, costs and target customers
Distributors and customers – can be used to determine buyer expectations and purchase patterns
Employees with experience in the target market – can be used to determine opinions about general conditions, cultural impact and business methods
External sources and experts:
Representatives of the target country – can be used to determine trade and market conditions specific to the country and cultural considerations
Trade or industry associations – can be used to determine practices, trends and conditions related to the organization’s expertise
Non-governmental associations (NGOs), universities and trade-related businesses – can be used to determine comparative market, population and demographic statistics, competitor information and credit information
Publications, directories and yearbooks – can be used to determine market statistics, general information about trends, interests, demands and regulations, sources of information and advice
Various Internet sites – can be used to provide fast access to publications, directories, yearbooks, statistics and market research reports
When should you dive into secondary data?
Researchers should always check whether secondary research data are available internally before accessing external sources.
There are several reasons why a research project should always investigate secondary data sources first:
- It is cheaper to collect secondary data than it is to collect primary data.
- It is faster to collect secondary data than it is to collect primary data.
- Secondary data might be available that answer the market research objectives without the need for primary research.
- Secondary data collection can help improve a researcher’s understanding of a marketing problem and therefore lead to better design for the primary research.
Secondary data should also be used in the following circumstances:
- When companies are considering entering unfamiliar markets, secondary data enable companies to gain an appreciation of the nature of the market and the competitive business environment without spending too much money
- When researchers need facts that would be unrealistic or unnecessary to gather from a primary research source, such as the annual consumption of coffee in Poland or the population of Trinidad
- When researchers need to understand or monitor trends in financial issues, business conditions or demographic factors
- When primary research is too difficult or too expensive to access, secondary data might be all that is feasible
What kind of information can you gather from secondary research?
The amount of information that company researchers will be able to glean from desk research will depend on the nature of the research objectives that they are trying to meet. Desk research is particularly useful for obtaining information in the areas outlined below:
Business and market conditions
When companies are considering a potential new international market, they will probably want to understand the condition of the economy, demographic information, laws or regulations that might impact on a business venture and socio-cultural aspects that might affect sales or require product or service adaptations. This type of information is widely available in print and online.
Companies can also determine the size of most international markets using desk research. The business press, industry directories, company financial data, information from trade associations and government data contain a wealth of this type of information.
Competitors and competing products
When companies want to investigate the competing companies and brands in a target market, they can obtain information from company websites, the business press, trade directories and company accounts. Advertising and promotional materials prepared by competing companies can sometimes be viewed online, and product specifications and illustrations can be downloaded from competitors’ websites. In some business fields, trade publications will review and compare competing brands. Even mail-order catalogues can provide valuable information, such as prices.
Although desk research can provide useful information about the competitive marketplace, it might not be satisfactory for companies that need to determine customer opinions about a competing company or a brand. If a company is fortunate, there might be published market research that has addressed this issue already. If not, the company will need to conduct primary research.
Desk research can make a real difference
Portakabin is a U.K.-based company that has been producing modular buildings for 45 years. In 2006, Portakabin used secondary research to guide the design of two new buildings for the U.S. market. The secondary research
Portakabin used to guide its new designs was a Gallup Management Journal Survey of U.S. employees.
This survey looked at which aspects of the work environment had the most impact on improving employee performance and provided data about how employees react to their work environment. Results showed that employees with poor lighting conditions or those who could not see outside their workspace were much more likely to be unhappy and disengaged at work.
Noise and uncomfortable working temperatures also tended to make workers disengaged. The study also suggested that employees prefer to work in a modular building that looked like a permanent structure.
Based on this research, Portakabin developed buildings with natural lighting and an interior and exterior appearance that would be more pleasing to employees, thus encouraging productive work.
Secondary research can reduce both the time and overall costs involved in gathering international trade research.
These advantages take on great value for companies involved in international trade research because the distances involved, the limited familiarity with the target market and potential issues with language can add substantial time and cost to data gathered through primary research methods.