What is primary research v/s secondary research for market estimation?
So far, we have covered the market sizing concepts of TAM, SAM, and SOM, for a given ICP. But where do we get the numbers to calculate them?
When you're sizing up a market, think of market estimation methods as gathering clues.
You're using different ways and sources to collect information that's crucial for understanding things like how big the market is, who your customers might be, and what they're into.
Example:
Imagine a startup in India creating a new digital payment app. They're trying to figure out how many people might use it.
They start by asking people in cities and towns through online surveys about their payment habits, dive into reports on how often folks in India use digital payment apps, and even check out what people are saying about similar apps in app stores or tech forums.
Types of research:
There are a few ways to gather this intelligence:
☞ Primary Research: This is like doing the detective work yourself – conducting surveys, interviewing potential users in various Indian cities to get firsthand info on what they think about digital payments.
☞ Secondary Research: This is more like being a historian – you're looking at data that's already out there, like studies or reports about the digital payment scene in India.
☞ Online Analytics and Tools: Using digital platforms to see how people behave online, spot market trends, and keep an eye on what competitors are up to.
☞ Competitor Benchmarking: Checking out how other digital payment apps are doing in India – how many people are downloading them, what users are saying, and so on.
Mixing these methods helps paint a clearer picture of the market, helping you make better estimates about your business's potential.