Market research is probably a term you’ve heard before — but do you really know what it is?
Simply put, market research is the process of gathering information from a target market, in order to learn how they feel about a product or service. This process can help a company figure out if a product is viable, based on the opinions and feedback of the participants.
In general, market research is a blanket term that covers a lot of different things. For example, surveys, focus groups, and product testing are all forms of market research. Basically, it’s anything that helps a company learn how people feel about its product.
Of course, for that research to be effective, companies need to reach a wide audience. A single opinion isn’t necessarily representative of the entire target market. With this in mind, it’s important for researchers to reach a variety of people within the market to establish a general consensus.
Everything we’ve mentioned so far are examples of primary research. This means that the information is gathered directly from the source. But market research also consists of secondary research. In this case, companies use information that already exists. Using both primary and secondary can help to establish a more definite understanding of the target market.
Overall, the purpose of all of this is to gain understanding of how interested in a product consumers will be. For example, say a company is releasing a new flavor for a soft drink. They’ll likely ask members of the market how the flavor sounds to them. They might have them taste test it. From there, the company can get a pretty good idea of whether or not the new flavor will be successful.
Once a company conducts its research, they can determine whether the product is ready, or if they need to make some changes. By doing this work up front, they limit risk, and can set product performance expectations more accurately.
Market research is a complex process, and it can take a lot of different forms. But the idea itself is pretty simple. Now that you know what the general goals and common practices are, you should have a better idea of how it works, and how it can help.