Definition & Examples of Market Research Show
Jon Feingersh / Getty Images Market research is the gathering and analysis of information about groups of buyers known as markets. Learn how businesses can use and benefit from it, the types of research you can conduct, and how it differs from marketing research. What Is Market Research?Market research is the systematic collection and interpretation of data on a particular market of actual or potential buyers through the use of analytical methods and approaches. The goal of market research is to provide decision-makers with insights into the potential of a market, which can be used in business planning, product development, and marketing strategy. How Market Research WorksWhether you intend on entering the consumer, commercial, or reseller market, it's important to identify what your market needs and wants before you enter a market or develop products, services, and marketing for it. If you enter the market cold, you could waste time and money on an offering that your market is unlikely to respond to. With that aim, a business typically conducts market research to gauge the viability of a brand or specific products or services. Market research can take the form of any planned activity that helps a business gain insights into a market and associated customers and competitors. The process boils down to three steps:
For example, let's say that a clothing retailer wants to evaluate the potential of adding shoes to its product lineup. To start, it collects data by using the customer emails it has harvested through a store loyalty program to distribute a survey to those customers to gauge their interest in buying shoes from the company and what features they would most like to see in those shoes. The business then analyzes the data by studying the survey responses and identifying trends in customer interest (for example, the majority of respondents may express interest in buying athletic footwear). Finally, the company assesses the profitability of entering the shoe vertical and uses the feedback to guide it in designing, developing, and marketing the shoes they eventually sell. Benefits of Market ResearchIt's advantageous for a business to conduct market research for these key reasons:
Types of Market ResearchBusinesses can take qualitative or quantitative approaches (or a combination of both) to collect the data needed to obtain valuable customer insights. Qualitative Market ResearchThese are research methods that reveal customers' experiences, beliefs, and other qualities that cannot be counted. Qualitative market research entails open-ended research techniques, such as:
If you use the observation technique, strive to be discreet to ensure that your presence doesn't influence customers' behavior. Quantitive Market ResearchQuantitative approaches seek to obtain measurable data expressed in numbers, and include:
Certain methods, such as interviews, are conducive to obtaining either qualitative or quantitative data. For example, an interview can also be used to get measurable insights if you ask questions that elicit countable data (for example, "How much do you spend each month on clothing?"). Market Research vs. Marketing ResearchBoth market research and marketing research involve gathering and analyzing through an investigative process. But whereas market research is the process of gathering and analyzing information with respect to a specific market, marketing research involves reporting information that can be used for a variety of marketing activities, from identifying marketing opportunities to solving marketing problems. Marketing research more broadly covers all four P's that comprise the marketing mix—product, price, place, and promotion—in order to understand consumer preferences. In contrast, market research narrowly focuses on just one "p"—place, or consumer behavior in one target market—to gauge market demand. For example, a firm may conduct market research to determine whether there is demand for a brand, product, or service. It may conduct marketing research to fine-tune a marketing or advertising campaign, and to identify strategies for a particular marketing situation that the business faces.
Key Takeaways
What are the 4 types of marketing research?Four common types of market research techniques include surveys, interviews, focus groups, and customer observation.
What is the information gathered from market research called?Primary information is the data that the company has collected directly or that has been collected by a person or business hired to conduct the research. This type of information generally falls into two categories: exploratory and specific research.
What is market research and data gathering?It is a detailed, planned search process for all relevant data made by a researcher for a hypothesis. The most critical purpose of data collection in market research is to ensure that reliable data is collected for statistical analysis so brands can make decisions backed by rich data.
What types of data are for marketing information research purposes?Primary data sources include questionnaires and surveys. Secondary research is usually faster, easier and less expensive than primary research.. a company's own records and publications.. government publications.. competitors' websites and publications.. newspapers, journals and magazine articles.. |