Market research is a process that gathers and analyzes data for a company's product strategy. It may involve the use of surveys, product tests, and focus groups. Research may be conducted in-house or by a third party that specializes in market research.

Key Takeaways

• Companies commonly conduct market research before introducing new products to consumers.
• The results of market research may inform the final design of a product.
• Market research usually combines primary information, gathered directly from consumers, and secondary information, which is data available from external sources.

How Market Research Works

Market research is used to determine the viability of a new product or service. The results may be used to revise the product design and fine-tune the strategy for introducing it to the public. This can include information gathered to determine market segmentation. It also helps businesses set their products apart and create advertising that speaks to the right audience.

A business engages in various tasks to complete the market research process. It gathers information based on the market sector being targeted by the product. This information is then analyzed, and relevant data points are interpreted to conclude how the product may be optimally designed and marketed to the market segment for which it is intended.

It is a critical component in the research and development (R&D) phase of a new product or service introduction. Market research can be conducted in many different ways, including surveys, product testing, interviews, and focus groups.

Important

Market research is a critical tool that companies use to understand what consumers want, develop products that those consumers will use, and maintain a competitive advantage over other companies in their industry.

Primary Market Research vs. Secondary Market Research

Market research usually consists of a combination of:

• Primary research, gathered by the company or by an outside company that it hires
• Secondary research, which draws on external sources of data

Primary Market Research

Primary research generally falls into two categories: exploratory and specific research.

• Exploratory research is less structured and functions via open-ended questions. The questions may be posed in a focus group setting, telephone interviews, or questionnaires. It results in questions or issues that the company needs to address about a product that it has under development.
• Specific research delves more deeply into the problems or issues identified in exploratory research.

Secondary Market Research

All market research is informed by the findings of other researchers about the needs and wants of consumers. Today, much of this research can be found online.

Secondary research can include population information from government census data, trade association research reports, polling results, and research from other businesses operating in the same market sector.

History of Market Research

Formal market research began in Germany during the 1920s. In the United States, it soon took off with the advent of the Golden Age of Radio.

Companies that created advertisements for this new entertainment medium began to look at the demographics of the audiences who listened to each of the radio plays, music programs, and comedy skits that were presented.

They had once tried to reach the widest possible audience by placing their messages on billboards or in the most popular magazines. With radio programming, they had the chance to target rural or urban consumers, teenagers or families, and judge the results by the sales numbers that followed.

Types of Market Research

1. Exploratory Research

Used when little is known about the problem or opportunity. It helps identify issues, ideas, or hypotheses for further study. Common methods: focus groups, open-ended interviews.

2. Descriptive Research

Aims to describe characteristics of a market or population. It answers “what” questions, like customer demographics, buying habits, or product usage. Common methods: surveys, observational studies.

3. Causal Research (Experimental)

Seeks to determine cause-and-effect relationships. For example, how changing the price affects sales. Often involves controlled experiments or A/B testing.

4. Qualitative Research

Focuses on understanding opinions, motivations, and feelings. It is subjective and rich in detail. Methods: interviews, focus groups, ethnography.

5. Quantitative Research

Involves numerical data and statistical analysis to measure market phenomena. Methods: structured surveys, polls, and questionnaires.

6. Ethnographic Research

Studies consumers in their natural environment to observe real behavior rather than reported opinions.

How to Conduct Market Research

1. Define the Goals of the Study

   • Identify a clear, well-defined problem the research will solve.

   • Examples:

     • Determine consumer preferences.

     • Measure brand recognition.

     • Compare effectiveness of different ad campaigns.

2. Identify the Target Audience

   • Decide who will be included in the research.

   • Avoid wasting resources on unnecessary data collection.

   • Determine:

     • Which types of consumers to include.

     • How data will be collected.

     • How to minimize statistical errors or sampling bias.

3. Collect and Analyze Data

   • Record details like age, gender, and other relevant demographics.

   • Analyze the data to create a marketing report explaining the findings.

4. Use Findings to Make Business Decisions

   • Adjust strategies based on research results, such as:

     • Targeting a new consumer group.

     • Changing the price point.

     • Modifying product features.

5. Repeat the Process

   • Measure the impact of changes through new research.

   • Continue refining strategies over time.

Benefits of Market Research

Market research is essential for developing brand loyalty and customer satisfaction. Since it is unlikely for a product to appeal equally to every consumer, a strong market research program can help identify the key demographics and market segments that are most likely to use a given product.

Market research is also important for developing a company’s advertising efforts. For example, if a company’s market research determines that its consumers are more likely to use Facebook than X (formerly Twitter), it can then target its advertisements to one platform instead of another. Or, if they determine that their target market is value-sensitive rather than price-sensitive, they can work on improving the product rather than reducing their prices.

Example of Market Research

Many companies use market research to test new products or get information from consumers about what kinds of products or services they need and don’t currently have.

For example, a company that’s considering starting a business might conduct market research to test the viability of its product or service. If the market research confirms consumer interest, the business can proceed confidently with its business plan. If not, the company can use the results of the market research to make adjustments to the product to bring it in line with customer desires.

What Are the Main Types of Market Research?

1. Primary Research

   • Data collected firsthand for a specific purpose.

   • Examples:

     • Focus groups

     • Polls

     • Surveys

2. Secondary Research

   • Data gathered from existing sources.

   • Examples:

     • Academic articles

     • Infographics

     • White papers

Research Approaches

• Qualitative Research

  • Explores how customers feel and think.

  • Provides insights into motivations, opinions, and attitudes.

• Quantitative Research

  • Uses numbers and statistics to measure behavior.

  • Examples:

    • Website views

    • Social media engagement

    • Subscriber numbers

What Is Online Market Research?

Online market research uses the same strategies and techniques as traditional primary and secondary market research, but it is conducted on the Internet. Potential customers may be asked to participate in a survey or give feedback on a product. The responses may help the researchers create a profile of the likely customer for a new product.

What Are Paid Market Research Surveys?

Paid market research involves rewarding individuals who agree to participate in a study. They may be offered a small payment for their time or a discount coupon in return for filling out a questionnaire or participating in a focus group.

What Is a Market Study?

A market study is an analysis of consumer demand for a product or service. It looks at all of the factors that influence demand for a product or service. These include the product’s price, location, competition, and substitutes as well as general economic factors that could influence the new product’s adoption, for better or worse.

Discover how Global Survey blends qualitative and quantitative research to help brands connect with people. Start your project at www.globalsurvey.gs or email sales@globalsurvey.gs.

Aug 05, 2025