Market Assessment Basics
When people talk about "market research," they generally mean the gathering and presenting of factual information about the market. A "market assessment" takes this process a step further by incorporating an analysis of the information on which to then draw conclusions and make recommendations for how to proceed.
While some may argue otherwise, there are really just two major types of research — secondary and primary — and a good assessment will use both:
Secondary
Secondary research relies on data and information that has already been compiled or presented by others. As such, secondary research typically involves exploring a broad array of literature resources. These resources may include:
- Market-research reports prepared by others
- Company reports required by various regulatory agencies
- Company and industry reports prepared by investment houses
- Articles in newspapers or industry periodicals
- Formal papers presented at conferences
- Industry reports published by government or industry organizations
- Press releases issued by various companies or organizations
Generally, secondary research requires more time than money, but much of the most useful market data and analysis must be purchased from fee-based resources.
Primary
In contrast, primary research involves gathering new data. The most typical examples of primary research include original surveys, focus groups, or expert interviews. This kind of research can be time consuming and, if using experienced professionals, sometimes expensive. In the course of conducting secondary research, however, you will reach limits and then require further information that can be obtained only through primary research.
Whether using secondary or primary research, you'll be seeking two different types of information—quantitative and qualitative:
Quantitative
Quantitative data is hard numbers. This kind of information proves most useful in gauging the overall market for a product and in determining appropriate pricing and sales strategies. Examples of useful quantitative information include the annual sales of competing products, number of potential customers, growth rate of a sector, or the penetration rate of a complementary technology. This kind of information can often be obtained from published articles, papers, and reports; Web pages; trade associations; or interviews with knowledgeable people. Other types of quantitative information can be obtained through more costly primary research processes, such as surveys of potential customers.
Qualitative
With trustworthy and insightful sources, qualitative information can be the most cost- and time-efficient way to develop a market understanding. In a few sentences, the right expert will sometimes offer a nail-on-the-head business strategy. The risk of qualitative information is that it often reflects only the opinion or speculation of an individual. Thus, the key is to identify and connect with those individuals who are best able to provide the needed data. It's also good practice to seek multiple sources, with the hope that several of them will corroborate certain information.
The SBA Online Women's Business Center offers a comprehensive discussion on the benefits of conducting market assessments and the processes involved.