With the widespread adoption of the Internet, use of published secondary information (desk research) to scope a market is becoming increasingly common as a means of carrying out Market Intelligence.
Traditionally using desk research to find information about potential customers, competitors and intermediaries in markets has been a time intensive process, often carried out on an on-going basis to cope with the slow delivery of paper-based material. With the Internet, vast seas of information have opened up electronically making desk research a practical tool for research, particularly in dynamic markets where data is quickly out of date. Search engines, directories and widespread online magazines and reviews have made much marketing intelligence much easier. However, searching and knowing what you are looking for still remain skilled jobs. For instance we list some major sources on this site.
Desk research is the name given to finding published information which can include company financial details, analysts reports, market statistics or comments and information about the issues in a marketplace including patents, news and business relationships.
The basics of good desk research involve:
- Knowing where to look and what to look for
- Understanding the quality of the source material
- Ensuring you get the right information
Desk research can be a very challenging. You can spend hours looking for some information or data that simply doesn't exist, but that you don't know doesn't exist at the start. On the other hand you may find exactly what you want with in 5 minutes. If you want to do your own try our guide to desk research
One of the challenges for professional researchers is that the ease of availability of information on the Internet means that anyone can carry out their own research and finding information on the Web doesn't appear to be a difficult task - there are after all plenty of search engines to use.
But ask anyone to find you a specific piece of information such as the size of the market for shoes in France and the task suddenly appears far more difficult. How do you sort the wheat from the chaff when the Internet seems wall-to-wall chaff? And how do you know when you have something useful, rather than just interesting?
What seems a simple exercise, such as doing a market analysis of your competitors can involve days of work with little to show for it if you don't know what you are looking for or where to look.
Core to any desk research is obtaining a list of sources Already the list of sources on this site that we have found useful. But for most studies, search engines are the primary route to finding information. It's important to realise there is a skill to using a search engine. Many links will typically take you to a dead end. What you want is something that will lead somewhere - a link to other appropriate sources.
If you do know the subject area or the key jumping off points you are likely to know exactly where to look immediately. This is where experienced researchers have advantages as typically they have a wider knowledge of sources and know where to look and how to look.
Even where other people have access to the same sources are being used, it is very easy to miss key pieces of information such as revenue or to confuse terms like market penetration with market share. Indeed there are some techniques of analysis which mean that experienced researchers are more able to extract value from the material they find.
Underpinning all Market Intelligence gathering is the need to understand the quality of the source materials. Different sources get their information in different ways and consequently it is necessary to reconcile different pieces of information and to judge which are the best sources of the information. Care is needed when using published reports (some tips here) as a source of information as some mask the way in which the data was collected, or report supposition as gospel truth.
Because different sources obtain their information in different ways it is important not to rely on a single piece of information if you can avoid it so also look for corroborating evidence unless the source is absolutely unimpeachable (such as government statistics).
Knowing how the data was obtained is central to knowing its value. If the information comes from a survey look to find the sample source and size. Were the people who replied self-selecting or is it a genuine cross-section? Are you told what the questions were? Have the data been adjusted in any way?
The best sources of information will provide you will detailed notes on methodology before buying a report so that you can review the quality before you get the data. Alternatively look to gather your own data using market research, or through on-going exercises to collect primary data (data direct from the source, rather than through intermediary analysts) such as those used for competitive intelligence.
If you are looking for financial information, public companies have to file accounts on a quarterly basic (10k forms in the US) and these can provide good background to an industry. The difficulty is that though the data is of high quality, the financial numbers tend to mask and merge many different sources of revenue making it difficult to get at specific pieces of information.
On the other hand, data such as blogs or news reports may providing interesting, but unverifiable data. Where something does appear in print, a good check is to try to find a second reference or look at the quality of other data that source has produced. Cross-referencing and triangulating help confirm what is likely to be true and what is more likely to be a guess, or piece of sales puff.
The golden rule for successful Market Intelligence desk research is to know what you are looking for and the question you are trying to answer. There is lots of information out there that will be interesting, but unless the information is important in answering your question, it will sidetrack you and slow you down.
Typically for market intelligence you are looking to gather key pieces of market statistics and company data about your competitors. What you are looking to do is not just find the information, but also to keep an eye on analysing why your competitors are saying what they are saying, what they aren't saying and what is missing and who they are saying it to.
For a market study core information includes the number of people/companies in the market, the names of the key suppliers (and market shares if possible), the size of the market in terms of value and units, information about key buyers or key buyer groups, current routes to market and pre-existing market segments and the market power of competitors. From this you would want to start to be able to estimate the spend per customer and how this would compare with your cost of sale.
By performing cross-analysis and looking for missing data (the deafening sound of silence) it becomes easier to spot weak spots and points of vulnerability. For instance by cross-analysing the data from competitors you can start to work out what the fundamentals of their business are. For instance, the number of customers they have, average sales size, revenue per employee. All data that helps understand what their company does and how it does it.
Not all information will be available. It may be necessary to use surrogate information or to think more laterally about what data might be available or might be correlated with the information you need. For instance, the number of employees a company has is often related to financial size and so might give indications of current sales. Alternatively where direct information is not available, such as say the number of yachts being chartered for holidays, then a lateral approach might be to look at the number of insurance policies sold for chartering.
The end result should be a report that delivers the right data - eg an estimate of market size - but that also shows how and where that data was obtained. In business planning, it is common to need a basic set of market estimates to show the viability of the venture and investors will look not just at the data, but also how that data was obtained to judge the potential of the plan.
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