What Is Market Research?

What Is Market Research?

Let me explain market research directly to you: it's a process where we gather and analyze data to shape a company's product strategy. This can involve tools like surveys, product tests, and focus groups. You might handle this in-house or hire a specialist firm to do it.

Key Takeaways

Companies often run market research before rolling out new products to consumers. The findings can directly influence the final product design. Typically, it mixes primary info straight from consumers with secondary data from outside sources.

How Market Research Works

Market research checks if a new product or service is viable. You use the results to tweak the design and refine your launch strategy, including market segmentation and product differentiation for targeted advertising.

To complete this, a business targets a specific market sector, gathers info, analyzes it, and interprets key points to optimize design and marketing for that segment.

It's vital in the R&D phase for new introductions. You can do it via surveys, product testing, interviews, or focus groups.

Important Note

Market research is a critical tool for understanding consumer wants, developing usable products, and gaining a competitive edge in your industry.

Primary Market Research vs. Secondary Market Research

Market research usually blends primary research, which you or a hired firm collect, with secondary research from external data sources.

Primary Market Research

This falls into exploratory and specific categories. Exploratory is open-ended, using focus groups, interviews, or questionnaires to uncover issues for further address. Specific research digs deeper into those identified problems.

Secondary Market Research

This draws from other researchers' findings on consumer needs, often available online today. It includes census data, trade reports, polls, and competitor research in the same sector.

History of Market Research

Formal market research started in Germany in the 1920s. In the US, it grew with the Golden Age of Radio. Advertisers studied listener demographics for programs to target audiences better, shifting from broad billboards to data-driven approaches, with sales tracking results.

Types of Market Research

Early methods included face-to-face interviews on streets about reading habits and ad recall, compared to publication circulation for effectiveness. We adapted these into modern surveys.

Focus Groups

You select a small group of consumers to try a product or view an ad, then gather feedback on perceptions to decide on release, changes, or abandonment.

Phone Research

This replaced street interviews for efficiency, but it's harder now with declining landlines and mobile prevalence.

Survey Research

Surveys are cost-effective for gauging attitudes via mail with incentives, helping assess feelings on products, brands, and pricing.

Online Market Research

Now shifted online, it's less intrusive; people sign up voluntarily to take surveys and share opinions at their pace.

How to Conduct Market Research

Start by defining study goals to answer a clear problem, like preferences or ad effectiveness. Decide on participants, data collection methods, and account for biases.

Collect and analyze data, tracking respondent details. Produce a report explaining results. Executives then use this for decisions like targeting or feature changes, looping back with more research.

Benefits of Market Research

It's key for brand loyalty and satisfaction, identifying demographics and segments likely to use your product. It shapes advertising too—if research shows Facebook preference over X, target there; if value-sensitive, improve the product over cutting prices.

Example of Market Research

Companies test new products or gauge needs. For a startup, research confirms interest to proceed or adjust the plan based on feedback.

What Are the Main Types of Market Research?

Primary includes focus groups, polls, surveys; secondary covers articles, infographics, white papers. Qualitative offers insights into feelings; quantitative uses stats like views and engagement.

What Is Online Market Research?

It mirrors traditional methods but online, with surveys for feedback to profile potential customers.

What Are Paid Market Research Surveys?

These reward participants with payment or discounts for questionnaires or focus groups.

What Is a Market Study?

It's an analysis of demand, considering price, location, competition, substitutes, and economic factors.

The Bottom Line

Market research is essential in R&D to gauge new product viability and real-world performance.