Market Research Definition: Types, and Example

What Is Market Research?

A new service or product's viability is assessed through market research, which involves interviews with prospective customers. A corporation can use market research to identify its target market and learn more about the interests of its customers by asking for their thoughts and other input.

The study could be carried out internally or through a market research-focused third party. Surveys, product evaluations, interviews, and focus groups can all be used. Typically, test subjects receive free product samples or a small stipend in exchange for their time.

At the research and development (R&D) stage of introducing a new product or service, market research is a crucial component.

Market Research Definition: Types, and Example

KEY TAKEAWAYS,

⭑Companies perform market research before to launching a new product to ascertain its attractiveness to potential customers.

⭑Focus groups, telephone interviews, and questionnaires are all examples of market research tools.

⭑The final product design and the product's positioning in the market are both influenced by the findings of market research.

⭑Primary information, obtained directly from customers, and secondary information, or data accessible from other sources, are typically combined in market research.

Understanding Market Research

A new product or service's feasibility is assessed via market research. The findings may be applied to modify the product's design and improve the launch plan.

Information obtained to identify market segmentation can fall under this category. It also influences how to differentiate products, which is then utilized to customize advertising.

To finish the market research process, a company does a variety of duties. Based on the market segment that the product is targeting, information is gathered. This data is then evaluated, and pertinent data points are interpreted, in order to reach conclusions about how the product might be designed and sold to the target market segment in the most effective way possible.

Primary vs. Secondary Market Research

⭑Typically, market research includes a combination of:

⭑Primary research is conducted by the business or a third party it hires. Secondary research is conducted using data from outside sources.

Primary Market Research

Exploratory and specialized research are the two main types of primary research.

Exploratory research employs open-ended inquiries and is less organized. The inquiries might be made through focus groups, phone interviews, or surveys. It causes concerns or questions regarding a product that the business is working on that need to be resolved.

Exploratory research uncovers problems or concerns; specific research dives deeper.

Secondary Market Research

The results of other researchers' investigations into customer needs and wants serve as the foundation for all market research. These days, a lot of this research is available online.

Census data from the government, research by trade associations, survey findings, and research from other companies in the same industry are all examples of secondary research.

Example of Market Research

Many businesses utilize market research to test new products or learn what kinds of goods and services consumers demand but don't currently have.

A corporation contemplating opening a business, for instance, might carry out market research to gauge the viability of its good or service. If consumer interest is supported by market research, the company can confidently move forward with its business plan. If not, the business can utilize the findings of the market research to modify the product to align it with consumer preferences.

History of Market Research

In Germany, formal market research first appeared in the 1920s.

With the start of the Golden Age of Radio, it quickly gained popularity in the United States.

Businesses who produced commercials for this new form of entertainment started to study the crowds that tuned in to the many radio plays, music shows, and comedy skits that were broadcast.

They had previously attempted to reach the largest audience by advertising in the most widely read periodicals or on billboards. Using radio programming, they may reach out to youth, families, or rural or urban consumers, and measure the success by the ensuing sales figures.

Types of Market Research

Face-to-Face Interviews

Market research firms have always questioned passersby about the periodicals they usually read and whether they remembered any of the advertisements or brands that were featured in them. To ascertain the efficiency of those advertisements, data gathered from these interviews were contrasted with the publication's circulation.

These early methods were modified to create market research and surveys.

Focus Groups

A focus group consists of a select group of people who have been asked to test out a product or view an advertisement.

After that, the group is questioned about how they feel about the product, the brand of the company, or rival items.

Phone Research

The telephone interview quickly replaced the man-on-the-street interview method. Information could be gathered more effectively and economically over the phone.

For long years, market analysts' favored method of research was telephone. Since the number of landline phone services has decreased and been replaced by less convenient mobile phones, it has been significantly more challenging recently.

Survey Research

Surveys are a more affordable option than focus groups for finding out what consumers think without having to do in-person interviews. Customers receive surveys in the mail, frequently accompanied by a coupon or other incentive to participate. These polls aid in understanding how customers feel about a given product, brand, and price range.

Online Market Research

Because more people are spending time online, market research activities have also moved online. A survey-style form is still used for data collection. Yet people can choose to sign up and do surveys and provide thoughts when they have time, rather than firms aggressively seeking participants by finding them on the street or cold phoning them on the phone.

As a result, the process is much less invasive and hurried because everyone may take part at their own pace.

How to Do Market Research

Establishing the study's objectives is the first stage in doing effective market research. Each study should aim to resolve a specific, well-defined issue. For instance, a business might look for consumer preferences, brand familiarity, or the relative efficacy of several ad campaigns.

The next step is to decide who will be a part of the research after that. Because market research is an expensive procedure, a business cannot squander resources by gathering pointless information. The company should establish in advance which consumer groups will be examined in the study, as well as how the information will be gathered. They should also take into account the likelihood of statistical mistakes or bias in sampling.

The next stage is to gather the information and examine the findings. This should be simple if the first two steps were correctly carried out. The findings of the survey will be gathered by the researchers, who will record the ages, genders, and other pertinent information of each respondent. The outcomes of their research are then explained in a marketing report that analyzes this.

The final step involves business decisions being made by firm executives based on their market research. Depending on the findings of their study, they can decide to target a new market demographic, alter their price point, or adjust a few product attributes.

More market research may eventually be used to quantify the effects of these modifications, and the process will start afresh

Benefits of Market Research

In order to increase brand loyalty and consumer happiness, market research is crucial. A strong market research study can assist in identifying the main demographics and market segments that are most likely to use a certain product because it is rare that a product will appeal to every consumer equally.

Also crucial to the creation of a company's advertising initiatives is market research. For instance, if market research shows that a company's customers are more likely to use Facebook than Twitter, they might direct their advertising to that platform rather than the other. They could also focus on upgrading the product rather than lowering pricing if they find that their target market is more value-sensitive than price-sensitive.

What are the main types of market research?

Primary research and secondary research are the two basic categories of market research. Surveys, polls, and focus groups are examples of primary research. Infographics, white papers, and scholarly articles are examples of secondary research.

Qualitative research reveals the thoughts and feelings of consumers. Data and statistics like website views, social media activity, and subscriber counts are used in quantitative research.

What is online market research?

Although it is carried out online, online market research employs the same methods and procedures as conventional primary and secondary market research. It's possible to ask prospective customers to take part in a survey or provide product feedback. The feedback could aid researchers in constructing a client profile for a potential new product.

What are paid market research surveys?

In paid market research, those who consent to take part in a study are compensated. In exchange for completing a survey or taking part in a focus group, they can be given a little fee for their time or a coupon.

What is a market study?

An examination of consumer demand for a good or service is known as a market study.

A market analysis looks at every aspect that affects consumer demand for a good or service. They include the cost, availability, rivalry, and alternatives of the product as well as broader economic variables that may have a positive or negative impact on how widely the new product is adopted.

The Bottom Line

A crucial part of a company's research and development (R&D) phase is market research. It aids businesses in anticipating the viability of a new product they are developing and in gauging how it might function in practice.

What Is Market Research? FAQ

What is market research explain?

Gathering and analyzing data on a market, product, or service in order to understand consumers, rivals, and the market itself is the process of conducting market research. Making educated decisions is made easier for businesses as a result of their increased understanding of their consumers, competitive environment, and prospective opportunities and dangers. Many activities, including as surveys, interviews, focus groups, and secondary research, can be a part of market research.

What are the 4 types of marketing research?

1. Descriptive research

2. Predictive research

3. Exploratory research

4. Causal research

What is an example of market research?

An organization conducting a survey to learn more about the tastes and purchasing practices of their target audience is an example of market research. They might inquire about their age, gender, amount of income, and the kinds of goods they buy.

What are the 4 main purposes of market research?

Finding and comprehending the target market: Market research aids businesses in finding and comprehending their target markets. It can reveal information on the tastes, wants, and motivations of the target market.

Product/Service Development and Innovation: Market research assists businesses in determining the requirements of their target market and developing new products and services to suit those demands. Also, it aids in their understanding of potential market positioning for new goods and services.

Market Entry and Expansion: Organizations use market research to successfully develop and carry out market entry and expansion strategies. They can use it to determine their target markets, gauge the size of the market, and estimate the level of competition.

Brand and Reputation Management: Market research assists businesses in protecting and enhancing their reputation and brand. It can assist firms distinguish their brand from rivals and offer insights into client perception.