Reviewed by Aug 27, 2020| Updated on
Market research is the method of evaluating a new business or product's feasibility through research that is performed directly with potential clients. Market research helps a company to explore the target market and get customers' thoughts and other input on their interest in the product or service.
Such form of research may be done in-house, by the organization itself, or by a market research-specialized third-party firm. It can be achieved by means of polls, product evaluations, and focus groups. Test subjects are normally provided with samples of the product and/or given a nominal stipend for their time.
Market research is a vital resource to help businesses understand what customers want, create goods to be used by those customers, and retain a competitive edge over other businesses in their industry.
Understanding Market Research in Detail
Market research focuses on the market associated with a specific product or service to assess how it will be perceived by the public. This can involve collecting information for market segmentation and product differentiation purposes, which can be used to target promotional campaigns or decide which features are seen as a customer priority.
To complete the market analysis process, an organization needs to participate in a number of activities. It needs to collect knowledge that is focused on the analysis of the business sector. The company needs to evaluate and interpret the resulting data to assess the existence of any trends or related data points it might use in the decision-making process.
How Does it Function?
The market analysis consists of a mixture of primary information, or what the company or an individual employed by the company has gathered, and secondary information, i.e. what has been gathered by an outside source.
Primary information is the data that an individual or business, employed to do the research, collected directly or that was collected by the organization. In general, this type of knowledge falls into two categories: exploratory and basic analysis.
Exploratory research is a less organized alternative and works with more open-ended questions, along with the result that the organization will need to answer concerns or issues. Specific work seeks solutions to previously established questions that are often posed by the exploratory study.
Secondary knowledge is data, which has already been obtained by an outside agency. It could include demographic statistics from government census results, trade association reports, or studies provided by another organization operating within the same business sector.