Market Research
Market Research is the process of gathering key data on audiences to identify valuable market segments and business ideas worth targeting. This involves conducting research into segments’ spending habits, their needs, their preferred purchase channels, major competitors, and any other relevant factors. This data can then help shape the market development strategy.[1]
While conducting Market Research an organization gathers, analyzes, and interprets information about a market, about a product or service to be offered for sale in that market, and about the past, present and potential customers for the product or service; research into the characteristics, spending habits, location and needs of your business's target market, the industry as a whole, and the particular competitors you face. Market research provides relevant data to help solve marketing challenges that a business will most likely face--an integral part of the business planning process. In fact, strategies such as market segmentation (identifying specific groups within a market) and product differentiation (creating an identity for a product or service that separates it from those of the competitors) are impossible to develop without market research. Market research involves two types of data:
- Primary information. This is research you compile yourself or hire someone to gather for you.
- Secondary information. This type of research is already compiled and organized for you. Examples of secondary information include reports and studies by government agencies, trade associations, or other businesses within your industry. Most of the research you gather will most likely be secondary.[2]
Market research helps entrepreneurs make well-informed decisions. It can take the guesswork out of innovation, and funnel resources into ideas and projects that hold the most potential. Businesses at different stages of growth carry out market research for different reasons. There is a list of ways how businesses can use market research:
- Determine the feasibility of a new business. If market research indicates there’s little or no demand for the product or service, the business is unlikely to succeed.
- Identify and develop potential new markets.
- Keep close tabs on marketing trends and develop strategies on how to stay ahead or adapt to changing market conditions.
- Test the demand for new products or features.
- Ensure optimal product placement – how, when, and where should a product enter the market.
- Improve and innovate their business. You can identify issues with certain business aspects such as customer service early. This can help companies overcome costly disruptions later.
- Boost the success of their promotional campaigns. By gauging customer sentiment and understanding the perception of their brand, businesses can better shape their branding and marketing strategies.[3]
See Also
- Market Analysis
- Market Cap
- Market Driven Organization
- Market Forces
- Market Research
- Target Market
- Product/Market Fit
- Product/Market Grid
- Marketing
- Marketing Effectiveness
- Market Maturity
- Marketing Plan
- Marketing Strategy
- 4S Web Marketing Mix Model
- 5C's of Marketing Strategy
- 7 Ps of Marketing