What Is Market Research?

Market research is a process that gathers and analyzes data for a company's product strategy. It may involve the use of surveys, product tests, and focus groups. Research may be conducted in-house or by a third party that specializes in market research.

How Market Research Works

Market research is used to determine the viability of a new product or service. The results may be used to revise the product design and fine-tune the strategy for introducing it to the public. This can include information gathered to determine market segmentation. It also informs 澳洲幸运5开奖号码历史查询:product differentiation, which is used to tailor advertising.

A business engages in various tasks to complete the market research process. It gathers information based on the market sector being tꦐargeted by the pr♌oduct. This information is then analyzed, and relevant data points are interpreted to conclude how the product may be optimally designed and marketed to the market segment for which it is intended.

It is a critical cꦬomponent in the research and development (R&D) phase of a new product or service introduction. Market research can be conducted in many different ways, including surveys, product testing, interviews, and focus groups.

Primary Market Research v🌼s. Secondary Market Research

Market research♏ usually consists of a combꩲination of:

• Primary research, gathered by the company or by an outside company that it hires
• Secondary research, which draws on external sources of data

Primary Market Research

Primary research generally falls into two categories: exploratory and specific researc൩h.

• Exploratory research is less structured and functions via open-ended questions. The questions may be posed in a focus group setting, telephone interviews, or questionnaires. It results in questions or issues that the company needs to address about a product that it has under development.
• Specific research delves more deeply into the problems or issues identified in exploratory research.

Secondary Market Research

All market research is informed by the findings o💫f other researchers about the needs and wants of consumers. Today, much of t💎his research can be found online.

Secondary research can include population information from government census data, trade association research reports, polling results, and research from other businesses operating in the same market sector.

History of Market Research

Formal market research began in Germany during the 1920s. In the United States, i💧t soon took off with the advent of the Golden Age o🍨f Radio.

Companies that created advertisements for this new entertainment medium began to look at the demographics of the audiences w𒉰ho listened to each of the radio plays, music programs, and comedy skits that were presented.

They had once tried to reach the widest possible audience by placing their messages on billboards or in the most popular magazines. With radio programming, they had the chance to target rural or urban consumers, teenagers or families, and judge the results by the sales numbers that ♏followed.

Types of Market Research

Face-to-Face Interviews

From their earliest days, market research companies would interview people on the street about the newspapers and magazines that they read regularly and ask wheth🎀er they recalled any of the ads or brands that were published in them. Data collected from these interviews were compared to the circulation of the publication to determine the effectiveness of those ads.

Market research and surveys were adapted from tꦆhese early techniques.

Focus Groups

A focus group is a small number of representativ🦹e consumers chosen to try a product or watch an advertisement.

Afterward, the group is asked for feedback on their perceptions of the product, the company’s brand, or competing products. The company then takes that information and makes decisions about what to do with the product or service, whether that's releasing it, making changes, or abandoning it altogether.

Phone Research

The man-on-the-street inteꦑrview technique soon gave way to the telephone interview. A telephone interviewer could collect information in a more efficient and cost-effecꦓtive fashion.

Telephone research was a prefer𓆏red tactic of market researchers for many years. It has become much more difficult in recent years as landline phone service dwindles and is replaced by less accessible mobile 🥂phones.

Survey Research

As an alternative to focus groups, surveys represent a cost-effective way to determine consumer attitudes without having to interview anyone in person. Consume𓆉rs are sent surveys in the mail, usually with a coupon or voucher to incentivize participation. These surveys help determine how consumers feel about the product, brand, and price point.

Online Market Research

With people spending more time online, market research activities have shifted online as well. Data collection still uses a survey-style form. But instead of companies actively seeking participants by finding them on the street or cold calling them on the phone, people can cho🗹ose to sign up, take surveys, and off𒆙er opinions when they have time.

This makes the process far less int🍒rusive and less rushed, since people can participate on their own time and of their own volition.

How to Conduct Market Research

The first step to effec♎tive market research is to determine the goals of the study. Each study should seek to answer a clear, we♊ll-defined problem. For example, a company might seek to identify consumer preferences, brand recognition, or the comparative effectiveness of different types of ad campaigns.

After that, the next step is to determine who will be included in the research. Market research is an expensive process, and a company cannot waste resources collecting unnecessary data. The firm should decide in advance which types of consumers will be included in the research and how the data will be collected. They should also account for the probability of statistical errors or 澳洲幸运5开奖号码历史查询:sampling bias.

The next step is to collect the data and analyze the results. If the two previous steps have been completed accurately, this should be straightforward. The researchers will collect the results of their study, keeping track of the ages, gender, and other relevant data of each respondent. This is then analyzed in a marketing report that explains the r🧸esults of their research.

The last step is for company executives 😼to use their market research to make business decisions. Depending on the results of their research, they may choose to target a dif✱ferent group of consumers, or they may change their price point or some product features.

The results of these changes may eventually be measured in further market research, and the process will begin all over again.

Benefits of Market Research

Market research is es♊sential for developing brand loyalty and customer satisfaction. Since it is unlikely for a product to appeal equal💙ly to every consumer, a strong market research program can help identify the key demographics and market segments that are most likely to use a given product.

Market research is also important for developing a company’s advertising efforts. For example, if a company’s market research determines that its consumers are more likely to use Facebook than X (formerly Twitter), it can then target its advertisements to one platform in♛stead of another. Or, if they determine that their target market is value-sensitive rather than price-sensitive, they can work on improving the product rather than reducing their prices.

Example of Market Research

Many compan💛ies use market research to test new products or get information from consumers about what kinds of products or services they need and don’t currently have.

For example, a company that’s considering starting a business might conduct market research to test the viability of its product or service. If the market research confirms consumer interest, the business can proceed confidently with its 澳洲幸运5开奖号码历史查询:business plan. I⛎f not, the company can use the results of the ꦉmarket research to make adjustments to the product to bring it in line with customer desires.

The Bottom Line

Market research is a key component of a company’s research꧟ and development stage. It helps companies understand in advance the viability of a ♋new product that they have in development and to see how it might perform in the real world.