SOURCE: Cutting Edge Information

June 10, 2008 14:56 ET

Study Explores Market Research Functions' Uses, Attitudes Toward Primary and Secondary Research

RESEARCH TRIANGLE PARK, NC--(Marketwire - June 10, 2008) - The average pharmaceutical company spends 59% of its market research budget to conduct primary research, according to "Developing Integrated Market Research Functions: Decision Support for 2008," a study by Cutting Edge Information ( Secondary research accounts for the remaining 41%. The report examines the benefits and drawbacks for either type of research. It also reveals companies' attitudes and uses for each.

Although the average shows that companies invest relatively similar amounts for primary research and secondary research, disparity occurs at the individual company level. For example, one company surveyed spends 95% of its market research budget on primary research, whereas another invests 75% of its market research budget on secondary research.

"Our data show that pharma companies not only have different research needs, but that they have diverse attitudes toward different types of research. Nonetheless, the most efficient companies carefully evaluate their research needs and plan accordingly," said Elio Evangelista, lead author of the report. "They use a variety of tools and achieve the right mix of primary and secondary data."

Several factors influence companies' decisions to use one type of research or the other. Cost is key: primary research is usually more expensive to collect than secondary research. CEI analysts also find that a product's lifecycle stage plays a role: most companies reduce spending on primary research once their products' growth slows down, as it makes less sense for companies to invest in primary market research because most aging brands will not be repositioned. Another concern that one company executive raised is objectivity: his company finds that secondary sources such as journals may be more objective than surveys or interviews, which can be subtly biased.

"Developing Integrated Market Research Functions: Decision Support for 2008," available at, is an extensive guide outlining surveyed companies' market research structures, budgets, staffing and outsourcing metrics. The report also includes best practices and strategies for elevating the market intelligence function to a stronger, more strategic decision support organization.

To download a free summary of this 173-page report, visit

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