Market research refers to the method of finding out the viability of a new product or service by conducting research directly with prospective customers. Market research can allow the company to determine the potential market and obtain opinions and opinions from customers regarding their enthusiasm for the service or product.
This kind of research could be carried out in-house or by the company’s staff, or by an outside company that has a specialization in market studies. It can be conducted through surveys, product testing as well as focus groups. Test subjects are typically paid with samples of the product or a small amount to cover their expenses. Market research is a crucial part of the development and research (R&D) of innovative products or services.
Key Points
Companies conduct market research to determine the feasibility of new products or services through direct communication to potential customers.
By conducting market research, companies can identify their ideal market and collect feedback and opinions from consumers in real-time.
This kind of research could be carried out in-house or by the company’s staff, or through an external market research company.
The research involves surveys, testing of products, as well as focus groups.
Market research is a combination of primary information, information gathered directly, or secondary information, which is information an outside entity has already gathered.
Understanding Market Research
The goal of market research is to analyse the market for a particular product or service and determine what the target audience will think of it. It can also include gathering information to help with market segmentation as well as product differentiation and can be used to make advertising more effective or to determine what aspects are considered to be the important factor for the customer.
Market research is a crucial instrument to help companies comprehend the needs of consumers, implement products that consumers utilize, and ensure an advantage over competitors in their field.
A company must perform various tasks to complete the process of market research. It must gather data about the market that is being studied. The company needs to analyse and interpret the information to determine the existence of any relevant patterns or information points it could make use of in its decision-making process.
How Market Research Gathers Information
Market research is an amalgamation of primary data that has been collected through an employee of the company or by someone appointed by the company or by a person hired by the company, as well as secondary information or data obtained by an external source.
Primary Information
Primarily, it is information that the company has directly collected or has been gathered by an individual or company contracted for conducting research. This kind of data generally is classified into two types, specifically exploratory research.
The exploratory research method is a more unstructured option that operates through more open-ended questions, and it leads to concerns or questions being raised that the company might need to tackle. Specific research provides solutions to previously identified issues that are typically identified by conducting exploratory research.
Secondary Information
Secondary information is information that an outside company has already collected. It could be information about the population taken from census data from the government or trade association research reports or published research from another company operating in the same market.
Example of Market Research
Many businesses use market research to test new products or get data from consumers on what kind of products and services they require but don’t have currently.
For instance, an example is that a company that was contemplating starting a business could undertake market studies to assess the effectiveness of its service or product. If the research proves that there is a demand from consumers, then the company can move forward with confidence in its business plan. The company should take the results of the research to make changes to the product to ensure it is in line with the demands of customers.
The Development of Market Research
Market research was formalized in Germany in the 1920s At the same time market research in the United States took off during the advertising boom of the Golden Age of Radio. Advertisers on the radio started to study the demographics that were revealed by the ways various radio shows were funded.
Face-to-Face Interviews
From that point, companies were formed to interview people in the street about the magazines they read, and whether or not they were familiar with any of the ads or brands that were featured in the advertisements that appeared in newspapers or magazines the interviewer had shown them. The data gathered from these interviews were then compared to the number of readers of the publication to determine how effective the advertisements were. Surveys and market research were adapted from these initial methods.
To have a clear knowledge of your market you must know the size of your market, demand economic indicators, geographic place of business, market saturation and pricing.
Phone Research
Data collection was later transferred to the phone, making contact via face-to-face not necessary. Telephone operators could gather data or even organize focus groups, and do it quickly and in a well-organized and organized manner. This technique helped improve the market research model dramatically.
Online Market Research
With more people spending time online, a lot of market research processes have gone online, too. While the method has changed but data collection remains mostly done using a survey-style format. However, instead of businesses actively searching for participants in the street or cold-calling them on the phone, individuals can join and complete surveys and give their opinions whenever they have the time. It makes it from being invasive and rushed, as people can take the initiative at their own pace and on their initiative.
What Are the Main Types of Market Research?
The primary kinds of market research include the primary type of research that comprises focus groups, polls, and surveys secondary market research that comprises infographics, articles and white papers. Qualitative research gives insights into what customers think and think, as well as quantitative research, uses statistics and data, including website views engagement on social media, and subscribers.
What Is Online Market Research?
Online market research is a type of market research conducted on the Internet. Market research conducted online can be quantitative or qualitative and follows the same format of primary and secondary methods of market research.
What Are Paid Market Research Surveys?
Paid market research may involve a set of people who are paid to take part in a study. This could include answering surveys, taking part in a group study, participating in research panels, and so on. The participants are usually selected and rewarded financially for their work and time.
Conclusion
Market research can help companies assess the demand and the effectiveness of their product, as well as to assess how it could work in the actual world. Market research is conducted via primary information or secondary data, and both provide unique insight into the product or service offered by a company.
Market research is an essential element of a company’s research and development (R&D) stage and is an essential element of its growth and success.
