Market research examines consumer behavior and trends in the economy to help a business develop and fine-tune its business idea and strategy. It helps a business understand its target market by gathering and analyzing data.

 

Market research is the process of evaluating the viability of a new service or product through research conducted directly with potential customers. It allows a company to define its target market and get opinions and other feedback from consumers about their interest in a product or service.

 

Research may be conducted in-house or by a third party that specializes in market research. It can be done through surveys and focus groups, among other ways. Test subjects are usually compensated with product samples or a small stipend for their time.

 

KEY TAKEAWAYS

  • Companies conduct market research before introducing new products to determine their appeal to potential customers.
  • Tools include focus groups, telephone interviews, and questionnaires.
  • The results of market research inform the final design of the product and determine how it will be positioned in the marketplace.
  • Market research usually combines primary information, gathered directly from consumers, and secondary information, which is data available from external sources.